Hong Kong’s Hang Seng index extended its rally for an eighth consecutive session on 12 May, marking its longest winning streak since May 2024. The index climbed nearly 3% to close at 23,549.46, bringing total gains over the past week to 4.1%. The Hang Seng Tech Index outperformed, clocking nearly 5% gains.
Mainland China markets also ended higher as the CSI 300 Index up 1.2% and the Shanghai Composite eked out slight gains.
The rally in Hong Kong equities came after the US and China agreed to a 90-day pause in their tariff dispute. Following trade talks in Geneva, the US announced plans to reduce tariffs on Chinese goods from 145% to 30% for the duration of the truce. In return, China will lower tariffs on US goods from 125% to 10%, with both countries set to implement the revised rates from 14 May.
US Treasury Secretary Scott Bessent confirmed the agreement, saying both sides had committed to ‘substantially lowering’ tariff levels over the three-month period.
The pause will take effect from Wednesday, with both China and the US confirming that discussions on economic and trade policy will continue.
Speaking after the negotiations, Trade Representative Jamieson Greer told reporters that 'the differences were not as significant as perhaps assumed.' He added that the two sides were engaging in constructive discussions on the issue of fentanyl.
Global financial markets had been closely looking out for any sign of easing tensions in the intense US-China trade war, which posed a threat to supply chains disruptions, destabilise global trade order and flare up prices.
Reflecting the improved sentiment, futures linked to key US benchmark indices also rose over 2% in response to the trade truce.
