HK-listed Chinese stocks surge on AI, EV rally as Trump tariffs loom

Hua Hong Grace Semiconductor

04/02/2025 04:56

Hong Kong, Feb 4 (Reuters) - Chinese stocks listed in
Hong Kong surged on Tuesday as investors loaded up on AI and EV
shares, despite looming U.S. tariffs on China.
    U.S. President Trump's 10% levy on Chinese goods is due to
go into effect at 1:01 pm in Beijing (0501 GMT), but investors
hope Trump's last-minute decision to suspend imminent tariffs on
Canada and Mexico may signal there is room to negotiate.
    Trump's press secretary said the president will speak with
Chinese President Xi Jinping in the next couple of days.
    "With Trump delaying tariffs on Canada and Mexico, will
there be negotiations before further escalation on China as
well? The market thinks there could still be room for talks,"
Jason Chan, senior investment strategist at Bank of East Asia. 
    The Hang Seng China Enterprises Index  .HSCE  jumped 2.6% at
midday trading break to a three-month high, while Hang Seng Tech
Index  .HSTECH  surged 3.9%. The benchmark Hang Seng index
 .HSI  added 2%.  
    AI-related stocks led the rally as investors continued to
pile up wagers on home-grown firms after startup DeepSeek
released a large language model at a cheap cost. 
    China's top chipmaker SMIC  0981.HK  surged as much as 9% to
a record high, and peer Hua Hong Semiconductor  1347.HK 
advanced 8.7%. 
    The EV sector also lifted the market, with carmaker XPeng
 9868.HK  jumping 12.6% after the company said it delivered a
nearly three-fold increase in smart EVs in January year-on-year.
    Financial markets in mainland China will reopen on Wednesday
after the long Lunar New Year holiday, and are poised to play
catch-up with global markets, he added. 
    China's benchmark blue chip index  .CSI300  fell 3% in
January before the holiday, surrendering nearly half of
September's 40% rally. 
    The markets may look through the political noise to focus on
China’s responses to U.S. tariffs and the upcoming National
People's Congress (NPC) meeting in the next few weeks, analysts
at Citi said in a note.
    Capital Economics said the additional 10% tariff that Donald
Trump has applied on Chinese goods will have a relatively modest
impact on China’s economy, especially if the PBOC allows the
yuan to adjust, but predicted the trade war with the U.S. will
be protracted.
      

 (Reporting by Hong Kong Newsroom; Editing by Kim Coghill)
 ((jiaxing.li@thomsonreuters.com +852 63358304))