Hong Kongs benchmark Hang Seng Index surged to its highest level in more than three years on Tuesday, lifted by optimism over Chinas infrastructure buildout and expectations of new policy support from Beijing.
The rally was underpinned by strong gains in solar and electric vehicle stocks, as well as power and construction shares linked to a major dam project in Tibet.The Hang Seng Index closed up 135 points, or 0.54%, at 25,130, its highest since November 2021.
The rally took place on robust trading volumes, with main board turnover hitting HK$266.1 billion.Mainland gains mirror Hong Kong strengthOn the mainland, the CSI 300 Index of Chinas largest listed companies climbed 0.8%, reaching its strongest level since November 2024.
The Shanghai Composite Index added 0.6% to 3,581, while the Shenzhen Component Index advanced 0.84% to 11,099.Investor sentiment was buoyed by solid second-quarter economic data and growing anticipation that a forthcoming high-level Politburo meeting led by President Xi Jinping will deliver measures to tackle overcapacity in strategic sectors such as solar panels, electric vehicles and lithium batteries, industries currently grappling with falling prices and saturated supply.Infrastructure and green tech in focusThe market rally was amplified by news of construction commencing on what is being billed as the worlds largest dam project in Tibet, a development that fuelled interest in power and infrastructure-related firms, according to a Reuters report.Live EventsShares of Xinyi Solar rose 4.8% to HK$3.07, while affiliate Xinyi Glass Holdings climbed 7.2% to HK$8.75.
BYD, a leading EV maker, gained 5.1% to close at HK$134.20.Investors are now looking ahead to the Politburo meeting later this month, which is expected to outline Chinas economic strategy for the second half of 2025.
Market participants hope that the gathering will confirm additional policy support for new industries while addressing broader challenges such as tariff pressures and the prolonged slump in the property market.
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