Hong Kong Equities Recover on Trade Hopes and U.S.–EU Deal

Hong Kong shares climbed 202 points or 0.8% to 25,590 on Monday morning, reversing losses from the prior session. The rebound followed news that the U.S. had reached a trade framework with the EU, imposing a 15% tariff on most EU goods—half the previously threatened rate—just a week after a similar pact with Japan on auto tariffs. Sentiment was also lifted by a South China Morning Post report that the U.S. and China are likely to extend their tariff truce by another three months ahead of a third round of talks this week. Investors also looked ahead to the upcoming Politburo meeting, expected to set economic direction for the rest of the year. However, gains were capped after data showed China’s industrial profits fell 1.8% yoy in H1 2025, a deeper drop than the 1.1% fall in Jan–May, amid deflation pressures and trade uncertainty. Focus now shifts to official PMI figures for July, due later this week. Notable gainers included AIA Group (5.4%), HKEX (2.8%), and CK Hutchison (1.6%).