【Zhenzhuo Hong Kong Stock Market Expert】The dawn of the trade war is emerging, and the market is expected to remain volatile
Hong Kong Stock Market Trends and Analysis
U.S. stocks rebounded after an initial decline last Friday, as President Donald Trump stated that imposing 100% tariffs on China is unsustainable. The market anticipates that a meeting between the leaders of the two countries will help ease the trade war, leading all three major indices to close higher. The U.S. dollar fluctuated but rose overall, with the 10-year Treasury yield climbing back to 4.01%. Gold prices surged before retreating, while oil prices stabilized after an initial drop. Hong Kong-listed depositary receipts generally rose, and the market is expected to open higher in early trading. Mainland Chinese stocks performed poorly last Friday, with the Shanghai Composite Index opening high but closing down 1.9%, and trading volume in both Shanghai and Shenzhen markets also declined. Hong Kong stocks fell significantly last Friday due to concerns over U.S.-China trade tensions and external credit risks, driving up market risk aversion. The Hang Seng Index fell below several moving averages, though overall trading remained active. With signs of progress in U.S.-China trade talks, market sentiment has improved, and a rebound is expected. Future market movements will continue to be driven by news, with volatility likely to persist, and the index is expected to fluctuate between 25,200 and 26,200 points.
Industry News
The National Bureau of Statistics reported that China's Consumer Price Index (CPI) fell 0.3% year-on-year in September. For the first nine months of the year, CPI declined 0.1% year-on-year. Food prices dropped 4.4% year-on-year, while non-food prices rose 0.7%. On a monthly basis, CPI increased 0.1% in September, with food prices up 0.7% and non-food prices down 0.1%. In September, prices for food, tobacco, and alcohol fell 2.6% year-on-year, contributing to a 0.74 percentage point drop in CPI. Within the food category, fresh vegetable prices fell 13.7%, dragging CPI down by 0.35 percentage points; egg prices dropped 11.9%, reducing CPI by 0.08 percentage points; and meat prices declined 8.4%, lowering CPI by 0.27 percentage points, with pork prices alone falling 17% and contributing to a 0.26 percentage point drop in CPI. Meanwhile, the Producer Price Index (PPI) fell 2.3% year-on-year in September, narrowing by 0.6 percentage points from the previous month. For the first nine months of the year, PPI declined 2.8%. The National Bureau of Statistics noted that the consumer market remained stable overall in September, with core CPI (excluding food and energy prices) rising 1% year-on-year, marking the fifth consecutive month of expansion. The narrowing decline in PPI reflects the impact of lower year-ago comparison bases and the continued effects of macroeconomic policies. Persistent deflationary pressures in the mainland leave room for the People's Bank of China to further ease monetary policy, which could improve market sentiment.
Harbour Family Office Business Development Director, Guo Jia Yao, CFA
Date: Saturday, October 18, 2025
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