Hong Kong stocks surged on Monday after the U.S. and China announced a trade deal that includes a 90-day pause on tariffs and a significant reduction in reciprocal tariffs by 115 percentage points. The Hang Seng index in Hong Kong saw a notable increase of 2.98%, closing the day at 23,549.46. The Hang Seng Tech index soared by 5.16% to 5,447.35, reaching its highest levels since March 27.
Mainland China’s Shanghai Composite Index also rose by 1.16% to end the day at 3,890.60. In Japan, the Nikkei 225 closed 0.38% higher at 37,644.26, while the broader Topix index rose by 0.31% to 2,742.08. South Korea’s Kospi index climbed 1.17% to 2,607.33, and the small-cap Kosdaq moved up 0.4% to 725.40.
Indian stocks were set for their best session in nearly a year. As of 1:25 p.m. local time, the Nifty 50 benchmark had gained 3.39% to 24,820.90, while the BSE Sensex advanced by 3.17% to 81,968.22, recovering from last week’s losses following India’s strikes on Pakistan. Hong Kong’s Hang Seng Tech Index traded 6.16% higher late in the day, buoyed by the trade deal news.
Among the top performers were companies surging 16.49%, 16.14%, and 11.57%. Both Indian and Chinese markets rallied on Monday, strengthening their respective currencies. The Chinese yuan appreciated by 0.35% against the U.S. dollar, while the offshore yuan gained 0.47%.
The Indian rupee strengthened by 0.74%. Conversely, the Korean won and Japanese yen depreciated 0.97% and 1.58%, respectively.
Hong Kong stocks jump with trade deal
Asian pharmaceutical stocks declined after U.S. President Donald Trump announced plans to sign an executive order to cut prescription drug prices in the U.S. Japanese pharmaceuticals plunged the most, followed by significant declines in South Korean, Hong Kong, and Indian pharmaceutical firms. Pakistan’s benchmark KSE-100 index surged 8.84% to 116,650.12, its highest level since January 3. The KSE-30 index also rose by 9.25%, hitting its highest point since April 23.
Despite the India-Pakistan ceasefire, Chinese defense stocks continued to climb. AVIC Chengdu Aircraft surged by 18.365%, while China State Shipbuilding Corporation advanced by 8.28%. Taiwan’s Taiex index saw a gain of 1.12%, mainly driven by the energy, utilities, and technology sectors.
Major tech firms, including Foxconn, also experienced gains. Hong Kong shares continued their upward trend, with the Hang Seng Index rising 1.44%, marking its eighth successive day of gains. Shares of Chinese battery giant CATL surged by 3.43% on the Shenzhen Exchange after announcing its plan to raise around $3.99 billion through a Hong Kong listing.
The company has significant interest from cornerstone investors. Australian mining stocks also benefited from the positive sentiment surrounding the U.S.-China trade deal, seeing considerable gains in Monday’s trading session. It was a strong day for Asia-Pacific markets as most indices experienced significant gains.
The U.S.-China trade deal announcement provided much-needed optimism amid geopolitical tensions and economic uncertainties. Investors remain hopeful for continued diplomatic progress and stable economic growth in the region.
