Hong Kong stocks closed up from a four-week low after a private survey showed that China’s manufacturing industry expanded at the fastest pace in four months, easing some concerns about the reciprocal tariffs to be unveiled by the US.

The Hang Seng Index rose 0.4%, and the Hang Seng Technology Index rose 0.2%.

Laopu Gold rose 19%; XPeng rose 5.6%; Pop Mart rose 5%; Kuaishou rose 3.3%; Alibaba, Tencent, Meituan rose 1.4%; Xiaomi down 5.5%.

The purchasing managers’ index (PMI) compiled by Caixin rose to 51.2 in March, according to a statement by Caixin and S&P Global on Tuesday. That is the highest reading since November when the gauge reached 51.5. An official PMI report released by the statistics bureau on Monday showed the sector expanded at the fastest pace in a year last month.

The readings add to evidence that China’s economic recovery is getting under way, albeit in a mild manner, after a slew of stimulus measures last year. Economists from Nomura Holdings and Morgan Stanley forecast a moderation in growth in coming quarters as the downturn in home prices continues and the effect of a trade-in programme for consumer goods fades.

“China’s economic data is improving, but at a very slow pace,” said Yan Zhaojun, an analyst at Zhongtai Securities. “There’s no fresh catalyst for Hong Kong stocks for now, and stocks are likely to trade sideways. Risk aversion is rising because of the disruption from the reciprocal tariffs.”

Investors are also watching for the reciprocal tariffs, which US President Donald Trump is expected to announce on Wednesday. His top spokesperson said the announcement would feature “country-based” tariffs, but added that the president is also “committed” to implementing sector-based duties at another time.

In the first quarter, the Hang Seng Index jumped 17 per cent as the best performer among the world’s key stock gauges. It rose 0.8 per cent in March, the smallest monthly gain in the four-month winning streak.

The world-beating rally in Hong Kong stocks shows signs of exhaustion after Chinese tech stocks narrowed a valuation gap with the US’ Magnificent Seven stocks while jitters grew that Trump’s new tariffs would cripple exports, the key driver for China’s growth in 2024.