Hong Kong’s Hang Seng Index reversed an early dip on Monday as lower oil prices and improving sentiment around US-China talks helped the market join a broader advance across Asia.
The benchmark opened almost unchanged at 24,748 before swinging about 140 points higher in early trading.
The Hang Seng Tech Index started 0.08% lower, but Tencent and Alibaba were among the stronger technology names at the open.
The move came as China’s yuan strengthened to its highest level in more than three and a half years and investors turned their attention to Thursday’s meeting between US President Donald Trump and Chinese President Xi Jinping.
Hang Seng looks to Washington for the next catalyst
Hong Kong shares are heading into the week with geopolitics unusually close to the centre of the investment case.
US Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng held talks in New York over the weekend, with the two sides agreeing to establish a formal dialogue on artificial intelligence.
Washington also proposed a notification mechanism for AI incidents that reach the level of national-security concern, while officials discussed lower tariffs on some non-sensitive goods through a new Board of Trade.
MUFG Bank analysts told The Wall Street Journal that the Trump-Xi meeting is likely to focus on economic, trade and technology issues, including restrictions linked to AI.
They said a constructive outcome could support Chinese assets and companies tied to regional supply chains.
The talks have not removed the underlying disputes between Washington and Beijing, but they have given Hong Kong investors another reason to watch Thursday’s summit for signs of greater policy stability.
Lower oil helps, but higher rates still matter
Energy prices provided a second tailwind.
Brent crude slipped towards $103.50 a barrel and WTI moved below $100 as expectations grew that Saudi Arabia could restart about half the capacity of its damaged East-West pipeline within days.
Maybank analysts told The Wall Street Journal that cheaper oil should reduce pressure on Asian currencies and imported inflation.
That is supportive for Hong Kong and mainland Chinese assets, particularly after the recent energy shock complicated the global rate outlook.
The rates backdrop remains less comfortable. US two-year Treasury yields have risen sharply over the past two weeks, while futures imply a better-than-even chance of another Federal Reserve increase in October after last week’s hawkish move.
KOSPI surges while Japan stays shut
Elsewhere, South Korea delivered the region’s strongest move.
The KOSPI climbed 1.55% to 7,000.88 by late morning as Samsung Electronics jumped 4.21% and SK Hynix gained 0.93%, tracking Friday’s rebound in US semiconductor shares.
Japanese cash markets were closed for the Silver Week holiday, although Nikkei futures rose about 0.5%.
The yen traded around 156.7 per dollar after reports of rate checks last week fuelled speculation about possible intervention.
Mainland Chinese stocks also firmed. The Shanghai Composite opened 0.21% higher, the Shenzhen Component gained 0.55% and the ChiNext rose 0.93%.
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