China and Hong Kong Stocks Rebound Amid Industrial Profit Data and Stimulus Hopes

China and Hong Kong stocks rebounded as data revealed a narrowing decline in industrial profits. Markets rose on expectations of Beijing unveiling supportive policies to counter tariff pressures. Both Shanghai and Hong Kong indexes saw gains, aided by improved industrial profit figures and easing concerns over U.S. tariffs.

The markets in China and Hong Kong showcased a positive shift on Wednesday, recovering from previous declines as the latest data indicated a narrowing in the drop of industrial profits. This optimistic turn has led traders to speculate on potential new supportive measures from Beijing to address lingering tariff risks.

At the midday pause, the Shanghai Composite index was up by 0.52%, standing at 3,276.58. The blue-chip CSI300 index improved by 0.93%. The defense sector experienced a rally, surging 2.4%, while the semiconductor index climbed by 1.5%. Stocks associated with the Huawei concept recovered from earlier downturns, with electronics manufacturer Luxshare Precision boosting 5% and BOE Technology increasing by 1.7%.

Meanwhile, the Hang Seng Index in Hong Kong rose 0.42% to 19,239.85, following a brief dip to a two-month low. Chinese H-shares on the Hang Seng China Enterprises Index saw a 0.37% rise to 6,876.9. The recovery in both onshore and offshore markets was attributed to a reduced pace of decline in industrial profits and talk of further actions from Beijing to tackle potential tariff impacts. Despite worries about future U.S. tariffs, there is anticipation of Chinese policymakers instituting further economic stimulus.

(With inputs from agencies.)