Stocks Soar on Positive Economic Outlook

In a bullish turn of events, Hong Kong stocks have surged to a two-month high as investors express renewed confidence in China's ability to weather the ongoing tariff war and maintain stable economic growth.

The Hang Seng Index climbed by 0.4% to reach 23,765.60 at 10:08 AM local time, while the Hang Seng Tech Index also saw a modest increase of 0.2%. On the mainland, the CSI 300 Index gained 0.3%, and the Shanghai Composite Index edged up by 0.1%.

Electric Vehicle Sector Takes the Lead

Driving this positive sentiment, electric vehicle manufacturers made headlines with impressive gains. Li Auto surged by 3.9% to HK$115.20, while BYD followed closely behind with a 3.2% increase to HK$458. Additionally, major player Alibaba Group Holding enjoyed a rise of 0.7% to HK$122.60, and Meituan saw a slight uptick of 0.2% to HK$136.60.

Morgan Stanley Boosts Economic Projections

Highlighting the optimism, Morgan Stanley recently revised its economic growth forecasts for China. The investment bank has increased its 2025 growth projection to 4.5% from an earlier 4.2%, and bolstered the 2026 forecast to 4.2% from 4%. They anticipate further monetary easing, predicting a likely cut in the policy rate by 15 to 20 basis points by year-end.

Mixed Results Across Asia-Pacific Markets

In the broader Asia-Pacific region, market performances varied. Japan's Nikkei 225 dipped slightly by 0.2%, while South Korea's Kospi and Australia’s S&P/ASX 200 posted gains of 0.9%, reflecting a mixed but generally positive trading atmosphere.