Fresh signs of industrial strength in China are giving investors something to cheer about. As manufacturing activity records its fastest growth in a year, equities across China and Hong Kong have surged, temporarily pushing aside concerns over looming US tariffs. This unexpected resilience is capturing attention across global markets.
Chinese equities staged a notable comeback, powered by robust manufacturing figures that helped alleviate anxiety triggered by recent US trade announcements. The CSI300 index inched up by 0.29%, while the Shanghai Composite added 0.59%, closing at 3,355.31. The upswing was particularly pronounced in the healthcare and defence sectors, which soared by 3.4% and 2.9% respectively. Military exercises near Taiwan appeared to drive investor interest in defence-related stocks. In Hong Kong, the Hang Seng Index jumped 1.06%, buoyed by a 1.8% lift in the Tech Index by midday, further underscoring the rally’s breadth.
The uptick followed a wave of upbeat Purchasing Managers’ Index (PMI) data, signalling the strongest pace of manufacturing expansion in a year, largely driven by rising demand and resilient export activity. This outperformance has helped calm nerves rattled by the threat of intensified US trade measures, reinforcing confidence in China’s near-term economic direction.
Yet challenges remain. With new trade barriers potentially on the horizon, analysts are watching closely for Beijing’s strategic response. Investors are keenly attuned to how policymakers might buffer the domestic economy from future tariff impacts, especially as global trade dynamics continue to shift.
Beyond China, regional markets painted a mixed picture. The broader Asia ex-Japan index rose 1.29%, while Japan’s Nikkei saw a modest increase of 0.11%. These cautious gains reflect a landscape marked by measured optimism, as economies weigh growth potential against an evolving global trade backdrop.
China’s renewed industrial momentum may provide short-term support, but investor focus will likely remain fixed on how trade policies develop in the weeks ahead.
Fidelity China Special Situations PLC (LON:FCSS), the UK’s largest China Investment Trust, capitalises on Fidelity’s extensive, locally-based analyst team to find attractive opportunities in a market too big to ignore.
