Hang Seng leads with over 2.7% gains as U.S. spares electronics from immediate China tariff hike
Asian stock markets kicked off the week with a strong rally on Monday, buoyed by optimism following temporary relief from U.S. trade tariffs on Chinese electronics. Technology-heavy indices led the charge, with Hong Kong’s Hang Seng Index soaring 2.7%, driven by a robust rebound in tech shares.
The gains across the region mirrored Wall Street’s upbeat close on Friday, where U.S. equities climbed after the Federal Reserve reaffirmed its support for economic stability and several major banks reported stronger-than-expected earnings.
Hang Seng Outperforms as Tech Stocks Rebound
The Hang Seng Index posted the most impressive performance in Asia, boosted by a surge in tech companies that have significant exposure to U.S. markets. The White House announced that electronics would be temporarily exempt from the newly imposed 145% tariffs on Chinese imports, giving breathing room to companies like Lenovo Group, which rallied over 5.4%. Other major players such as Alibaba, Baidu, and Haier Smart Home gained between 4% and 5.5%.
South Korea’s KOSPI rose 1%, while Japan’s Nikkei 225 climbed 1.5% as regional tech sentiment improved.
However, U.S. President Donald Trump clarified that the electronics exemption is temporary. He warned that new tariffs targeting semiconductors and broader electronics imports may still be introduced in the coming weeks. Trump also announced plans for a national security review into the chipmaking industry, fueling market uncertainty.
China Markets Lag Amid Trade War Woes
Mainland Chinese indices posted more modest gains. The CSI 300 edged up 0.5%, while the Shanghai Composite increased 0.8%, as investors remained cautious following China’s 125% retaliatory tariffs on U.S. goods last week.
While the Chinese government is expected to roll out new stimulus measures to support its economy, the deepening trade conflict continues to weigh on investor sentiment. Key economic data, including China’s Q1 GDP, is due later this week and could further shape regional market direction.
Regional Gains Tempered by Persistent Trade Concerns
Beyond China and Hong Kong, broader Asia-Pacific markets also posted solid gains. Australia’s ASX 200 rose 1.3%, Japan’s TOPIX gained 1.5%, and Singapore’s Straits Times Index rallied 1.8%, supported by optimism around tech exports.
Despite these gains, concerns over the long-term impact of escalating trade disputes continue to linger. Singapore’s GDP grew less than expected in Q1 2025, prompting the Monetary Authority of Singapore to ease policy and slash its inflation forecast for the year.
Indian stock markets remained closed on Monday for a national holiday.