Hong Kong’s benchmark Hang Seng Index surged over 400 points on Friday before closing up 111 points. Full-day turnover topped HK$323.9 billion ($41.26 billion) — the highest in three months, signaling what analysts see as a revival of investor confidence.
The HSI ended at 24139.57 points with a rise of 0.46 percent, while the technology index climbed 0.61 percent to 5248.48.
Boosted by gains in technology and financial service sectors, the benchmark jumped more than 460 points in early trading and extended its gains in the afternoon session, at one point reaching 24506, a two-week high.
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Brokerage stocks drove the rally, with South China Financial Holdings Limited raising more than 100 percent, and Central China Securities Co Ltd up over 47 percent, as more brokers advance their applications for stablecoin licenses.
The special administrative region’s Stablecoins Ordinance will come into effect on Aug 1. More than 40 companies, including internet companies, financial institutions and payment processors, are preparing to submit their applications, according to media reports.
Chinese mainland pharmaceutical firm WuXi AppTec Co Ltd was one of the best-performing blue-chip stocks on the day, surging 10.46 percent following a positive profit alert for the first half of 2025. Its sister company WuXi Biologics Cayman Inc also rose 3.69 percent.
Sam Lee, head of equity research at China Merchants Securities International, said brokerage stocks have benefited from the recent increase in trading activity, overlaid with the rebound in the initial public offering (IPO) market since May and the SAR government’s latest stablecoins policy.
The sentiment received a boost this week, with an influx of southbound funds to the Hong Kong market that is believed will help improve investor confidence, he added.
“As the Federal Reserve’s interest rate path becomes more certain, the market also expects that China may cut the reserve requirement ratio and policy interest rate, which would be favoring the liquidity-sensitive financial sector,” Lee said.
The recent strong performance of the Chinese mainland stock market also gave the SAR’s market a push, according to Alvin Ngan, an equity strategist at Zhongtai Financial International.
“With the easing of trade tensions between the United States (US) and China, the outlook for tariff and trade issues between the two countries has been clearer, which has reduced the risk premium for Hong Kong stocks,” Ngan added.
Adding to the positive sentiment, Goldman Sachs Group Inc strategists on Friday upgraded the rating of Hong Kong equities to market-weight, raising their earnings growth forecast for the market in 2025 and 2026 to eight percent and six percent respectively, due to improved capital and real estate market activity.
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The investment bank also predicts Hong Kong will be one of the main beneficiaries of the Federal Reserve’s easing cycle which has led to a weaker US dollar, saying the city’s low interbank offered rate (HIBOR) would benefit economy and capital markets.
The one-month HIBOR increased marginally to 1.08 percent and the overnight to 0.089 percent, after the Hong Kong Monetary Authority (HKMA) brought HK$13.3 billion on Friday to protect the peg — its fourth purchase in two weeks.
Goldman Sachs downgraded Hong Kong stocks to “underweight” last November, citing weak property and retail sectors.
Contact the writer at gabylin@chinadailyhk.com
