Liquidity-Driven Market Rally Extends Weekly Gains In China, HK Indexes Struggled

Li Chen
29 Aug, 2025
Hong Kong

 

 Stocks in China and Hong Kong diverged on Friday, reflecting the weeklong pattern as investors reviewed the latest batch of earnings. 

The Hang Seng index advanced 0.8%, and the mainland-focused CSI 300 index edged up 0.5% amid earnings optimism and improving market liquidity. 

For the week, the Hang Seng index declined 1.7%, and the CSI 300 index gained 1.6% amid rising interest from foreign and domestic investors. 

Mainland China markets extended this year's gains to 17.5% and rose to a decade-high amid a liquidity-driven boom in stocks as retail investors rotated out of fixed-income products and bank deposits into stocks. 

However, the current market rally over the last twelve months lifted the CSI 300 index by more than 30%, driven by rising interest among retail investors and supported by state-controlled companies.

Alibaba Group Holding, ICBC, Bank of China, China Construction Bank, CITIC Securities, China Merchants Bank, Agriculture Bank of China, China Minsheng Banking, COSCO Shipping, and China Railway Group are scheduled to release their interim results later today.

Investors are betting that the U.S. Federal Reserve is more likely to lower the rate at the end of a two-day policy on September 17, and Friday's key inflation could influence that decision. 

 

China Indexes and Stocks

The Hang Seng Index added 0.8% to 25,191.21, and the mainland-focused CSI 300 Index increased 0.5% to 4,484.72. 

Haier Smart Home Co. Ltd. advanced 6.7% to HK $26.76 after the home appliance maker reported better-than-expected first-half profit. 

Trip.com Group Ltd. increased 5% to HK $580.0, advancing for the second day following strong quarterly results. 

Alibaba Group Holding Ltd. gained 0.7% to HK $116.60 ahead of the e-commerce company's interim results later today.