Despite predictions of a downturn ahead of Trump's inauguration, the Hang Seng Index has enjoyed a six-day rally, surpassing the 20,000 mark. This surge is attributed to robust December industrial output, retail sales, and a notable GDP growth of 5.4% in the last quarter. Interestingly, the rally gained traction not immediately after positive data was released but as deflationary signs emerged. Investors are likely to adopt a cautious approach ahead of significant political announcements, while expectations for policy support rise as China approaches the end of its Five-Year Plan.
Despite expectations of a pullback, the Hang Seng Index rose for six consecutive days, boosted by positive economic data from China.
The rally gained momentum after deflationary pressures were confirmed, reflecting a market adjustment where 'bad news' is seen as 'good news'.
Investors may adopt a cautious wait-and-see approach, particularly with pending tariff details and the upcoming National People's Congress.
In 2025, as China wraps up its 14th Five-Year Plan, increased policy support is expected across key growth sectors.
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