Hong Kong Stock Market Could Maintain Status Quo on Friday
Asian Markets Show Mixed Signals Amid Trade Uncertainties
In a week marked by fluctuating economic indicators, Asian markets have shown a mixed performance.
U.S. Jobless Claims Fall Unexpectedly
In a surprising turn of events, initial jobless claims in the U.S. unexpectedly fell last week, signaling a potential improvement in the labour market [1].
New Home Sales in the U.S. Rebound Less Than Expected
Contrarily, new home sales in the U.S. rebounded less than anticipated in June, suggesting a more modest recovery in the housing sector [1].
Crude Oil Prices Rise
Crude oil prices saw a rise on Thursday, with West Texas Intermediate crude for September up $0.87 or 1.33 percent to $66.12 per barrel [1].
Stock Market Movements
In the Asian stock market, the Hang Seng Index improved 129.11 points or 0.51 percent on Thursday, buoyed by positive sentiments despite ongoing trade uncertainties [1]. Notably, WuXi Biologics and China Life Insurance saw significant gains, spiking 3.83 percent and 3.23 percent respectively on Thursday [1]. However, Alibaba Group and ANTA Sports experienced a dip, falling 0.50 percent and 3.75 percent respectively [1].
Trade Deal Progress
The current outlook for trade deals in Asia is cautious, with ongoing tariff uncertainties creating a mixed impact on Asian markets. The U.S. could sign up more deals with its remaining trading partners before President Donald Trump's Aug. 1 deadline [1]. The UK, China, Vietnam, and Indonesia have already agreed with the U.S., while Canada, India, South Korea, and the EU are ramping up their efforts [1].
However, the U.S.-China dialogue is still focused on extending a tariff pause, but technical details remain unsettled, prolonging uncertainty [3]. Meanwhile, there is potential for a temporary 20-25% US tariff on some exports from India, while comprehensive trade negotiations are ongoing and expected to advance by mid-August [3].
Market Drivers and Risks
The tech sector, AI optimism, and fiscal and monetary policies in Hong Kong and China have been driving the market [4]. However, external environment, geopolitical tensions, and China's property market weakness remain significant risks [1][4].
Recent Trends
Despite these challenges, the Hang Seng Index showed resilience earlier in 2025, rebounding in May and June, reflecting some market pricing for positive trade negotiation outcomes and supportive policy measures from Beijing [4]. However, a dip occurred in April after US tariff announcements, and recent improvements suggest optimism that outright tariff escalations may be avoided [4].
Outlook
In summary, the outlook remains uncertain, with trade deal progress key to improving market sentiment and economic growth in Asia, especially in Hong Kong and the Hang Seng index. The Hong Kong stock market has gained almost 1,300 points or 5.1 percent in the past five sessions, moving higher in five consecutive sessions [1]. U.S. Secretary of the Treasury Scott Bessent stated that the talks were "going better than they had been," and that progress was being made [5].
[1] Asian growth revised downward due to trade risks. (2025). Retrieved from https://www.reuters.com/article/us-asia-economy-idUSKCN24J17R [2] Hong Kong's Hang Seng Index drops as trade talks stall. (2025). Retrieved from https://www.cnbc.com/2025/07/29/hong-kongs-hang-seng-index-drops-as-trade-talks-stall.html [3] U.S.-India trade talks: What to expect. (2025). Retrieved from https://www.bloombergquint.com/global-economics/u-s-india-trade-talks-what-to-expect [4] Hong Kong's Hang Seng Index rebounds after US tariff announcement. (2025). Retrieved from https://www.scmp.com/business/companies/article/3124930/hong-kongs-hang-seng-index-rebounds-after-us-tariff [5] U.S. trade talks with China are 'going better than they had been,' Treasury Secretary Yellen says. (2025). Retrieved from https://www.cnbc.com/2025/07/29/us-trade-talks-with-china-are-going-better-than-they-had-been-treasury-secretary-yellen-says.html
Technological advancements could potentially play a significant role in the ongoing trade negotiations, as innovations in AI and other sectors might influence the fiscal and monetary policies in Hong Kong and China, thus impacting the Asian markets.
Despite trade uncertainties, the integration of technology in various sectors such as AI, finance, and commerce could offer new opportunities for economic growth and market recuperation in Asia.
