China and Hong Kong equities climbed on Monday, supported by strong capital inflows and the inauguration of a free trade port in the tropical island of Hainan.
China’s blue-chip CSI300 Index closed up 1%, while the Shanghai Composite Index gained 0.7%. In Hong Kong, the Hang Seng Index rose 0.4%.
The surge follows data showing China’s private fund sector expanded to a record 22.1 trillion yuan in November, driven by robust inflows into equities.
Investor sentiment received an additional boost after the official launch of the Hainan Free Trade Port, a landmark initiative signaling Beijing’s continued commitment to economic opening. Shares of companies likely to benefit from the development—China Tourism Group Duty Free Corp, Hainan Airlines Holding Co Ltd, Hainan Airport Infrastructure Co Ltd, and Hainan Strait Shipping Co Ltd—each hit the daily 10% gain limit.
“The market is expected to resume its upward trend and is no longer hesitating,” said Orient Securities in a note to clients. The brokerage recommended investors consider adding positions, particularly in blue-chip and undervalued consumer stocks.
Meanwhile, sector performance was mixed. Chip makers and artificial intelligence stocks led gains, while banks and industrial stocks lagged. Xiaomi Corp fell 1.8% in Hong Kong and BOE Technology Group dropped 1.2% in Shenzhen after US lawmakers urged the Pentagon to list them among entities allegedly assisting the Chinese military.