Hong Kong and mainland stocks fell much less than expected despite lingering uncertainty over whether Chinese President Xi Jinping and his counterpart Donald Trump will meet later this month at APEC in Korea as investors saw it as bargain hunting opportunities.
The benchmark Hang Seng Index opened 656 points lower and once plunged 954 points to 25,236 following Trump’s 100 percent tariff threats on China, before trimming losses to close at 25,889, down 400 points or 1.52 percent.
Turnover surged to HK$490.3 billion, the highest since April 7, with a net northbound inflow of HK$19.8 billion from mainland investors.
Francis Kwok Sze-chi, vice chairman of the Hong Kong Institute of Financial Analysts and Professional Commentators, called the morning’s slump an “irrational selloff,” adding that the 400-point fall reflects a fragile balance between policy shifts and market sentiment rather than the resolution of underlying risks.
Kenny Ng Lai-yin, securities strategist at Everbright Securities International, attributed the Hong Kong market's rebound to a boost from the A-share market, which helped it recover some lost ground.
He expects the HSI to remain volatile due to uncertain trade talks, but within a constrained range.
Independent analyst Kenny Wen Kit said the rebound was partly driven by Trump’s softer tone on China.
After accusing Beijing of "becoming very hostile" over rare earths export curbs, he later wrote on Sunday night: "Don't worry about China, it will all be fine!"
He noted both sides want to avoid economic “depression.”
China’s foreign ministry warned it would take firm actions if the US persists in its unilateral measures.
In the mainland, the Shanghai Composite Index only fell 7 points to close at 3,889, while the Shenzhen Component Index lost 123 points to 13,013.
UBS said Chinese equities remain appealing, citing AI-related themes, brokerages, and high-dividend stocks as attractive opportunities, while JP Morgan noted a potential buying window before year-end if prices fall further.
Meanwhile, Comex gold futures at one point hit a record high of US$4,103 (HK$32,003) per ounce.
cicicao@singtaonewscorp.com
