China and Hong Kong Stocks Rebound Amid Service Sector Revival
China and Hong Kong stocks climbed as a private-sector survey indicated a strong recovery in China's services activity. The S&P Global China Services PMI showed the fastest expansion since May 2024, despite divergence with the official PMI. Market optimism counters domestic uncertainties and fragile U.S.-China trade relations.
China and Hong Kong stock markets rallied for a second day on Tuesday, reversing last week's sharp losses. The upturn was prompted by a private survey indicating robust recovery in China's service sector in July, bolstering investor confidence.
The CSI300 Index, a major benchmark, rose 0.3% by midday, with the Shanghai Composite Index climbing 0.5%. Hong Kong's Hang Seng Index also gained 0.3%, reflecting positive sentiment driven by the S&P Global China General Services PMI, which jumped to 52.6 in July from 50.6 the previous month. The rise suggests the fastest sector growth since May 2024, spurred by heightened demand and increased export orders.
However, analysts caution about potential gains consolidation amid ongoing U.S.-China tariff uncertainties and domestic economic challenges. Disappointing earnings from some Hong Kong-listed companies contrast with strong U.S. corporate results, notably in tech, putting additional pressure on the market.
(With inputs from agencies.)
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