Hong Kong stocks climbed on Monday, with the Hang Seng Index reaching its highest level since June 15, as a strong rally in healthcare and biotechnology shares overshadowed disappointing Chinese economic data. The index rose to 24,692, up roughly 9.7% from its 2023 low, despite China's second-quarter gross domestic product (GDP) growing at a slower-than-anticipated pace.
China GDP Misses Expectations
China's National Bureau of Statistics reported that the economy expanded 4.3% in the second quarter, below the 4.5% forecast and a deceleration from the 5.0% growth recorded in the first quarter. Fixed asset investment fell 5.7% in Q2, worse than the 5.0% decline analysts had predicted and a steeper drop than the 4.1% contraction in Q1. House prices also continued their prolonged slide, falling 3.3% in June.
On a more positive note, industrial production rose 5.3% in June, the unemployment rate edged down to 5.0% from 5.1%, and retail sales increased 1.0%. These signs of stabilization, along with a strong trade report released Friday showing exports surged 27% in June, likely contributed to investor optimism. The trade surplus widened to $125 billion as imports also jumped 36%.
Healthcare and Biotech Lead Gains
The Hang Seng's advance was led by healthcare and biotech names. Innovent Biologics surged 8.5%, WuXi AppTec gained 5.4%, and CSPC Pharmaceutical Group, Hansoh Pharmaceuticals, Sino Biopharmaceutical, and Wuxi Biologics each rose more than 4%. The sector's strength reflects growing recognition of China's role in global pharmaceutical innovation. According to a recent Evaluate report cited by Axios, Chinese assets are expected to account for over two-thirds of total industry deal value this year, up 42% year-over-year, as Western pharma increasingly turns to China for licensing deals.
Meanwhile, laggards included China Hongqiao, Aluminum Corporation of China, Xiaomi, and China Life Insurance.
Technical Outlook
From a technical perspective, the Hang Seng Index has broken above the key resistance level of 24,185—its March swing low—confirming a bullish breakout. The index now trades above its 50-day exponential moving average, and the relative strength index is approaching the overbought threshold of 70. The next major target for the index is the 25,000 level.
For broader market context, see our Evening Digest and FTSE 100 coverage.
This article is for informational purposes only and does not constitute financial advice.
