While global markets continue to take stock of the conflict in Iran and energy shocks following the closure of the Strait of Hormuz, Hong Kong’s Hang Seng Index has been left largely unshaken from its two-year growth spurt.
The index was buoyed in recent days by China’s resilience in managing the ongoing energy crisis. Given that China is the world’s second-largest oil consumer, using 8.1 million barrels per day, surges in the cost of Brent crude have been a leading cause of concern for the country as leaders lowered their growth target for the year to 4.5 percent, their lowest rate since 1991.
At its peak, Brent crude rose to $119.50 per barrel, due to the closure of the Strait of Hormuz, a shipping lane that had seen around 20 percent of the world’s oil and liquefied natural gas (LNG) passing through it.
But with Russia expressing a willingness to assist China in its oil challenges, the outlook for the Chinese economy has strengthened, and for many stocks the pressure has lifted. The war in the Middle East may have been a major disruptive factor for Chinese stocks, but it appears that the Asian powerhouse is performing exceptionally well in terms of domestic productivity.
The Hang Seng index responded by recovering much of its losses since the escalation in the conflict between the United States and Iran began on February 28. Following an encouraging GDP report for the first quarter (Q1) of 2026, the Hang Seng rallied to HK$ 26,185, marking a 10 percent recovery from its lowest level this year. The Shanghai Composite Index also climbed to 4,637 yuan.
The jump was attributed to data released by the National Statistics Bureau (NSB), which showed that the economy had expanded 5 percent in Q1, marking a significant improvement on the previous quarter’s 4.5 percent growth.
Crucially, China’s GDP for the three-month period beat average estimates of 4.8 percent, helping the country’s gross domestic product to increase by 1.3 percent on a quarter-on-quarter basis.
The data showed that China’s fixed asset investments also rose by 1.7 percent in March, while the industrial capacity utilization climbed to 73.6 percent as export growth continued.
“After years of economic struggles, China has timed its recovery perfectly to put ongoing geopolitical stresses in the rear view mirror,” said Vsevolod Smirnov, head of marketing at Just2Trade. “The rollout of the country’s stimulus packages starting in 2024, rising copper prices, and the end of its zero-COVID policy have helped to inspire a widespread economic rebound.”
“With less regulatory oversight on China’s tech industries, a sustained rebound could mean that the Hang Seng has plenty of room to run as its low-cost AI leaders continue to win admirers around the world.”
China is fast becoming one of the world’s clean energy leaders, pledging to cut its greenhouse gas emissions across the economy by 7 percent to 10 percent by 2035, while investing heavily in renewables. These movements are helping the Hang Seng to build more resilience against geopolitical uncertainty, with more energy-efficient stocks rising as demand trends shift.
One example can be found in the recent debut of Sigenergy, a Shanghai-based energy storage system (ESS) maker, which rallied 103 percent on its first day of trading as demand for its products continued to grow. While the company added an offer price of HK$324.20, shares opened at HK$581 before climbing to a close of HK$659.50. Sigenergy raised HK$4.4 billion (US$560 million) from its IPO, highlighting the scale of its success.
Sigenergy offers systems to integrate solar power, battery storage, and electric vehicle (EV) charging, and its products are mostly designed for households. Its status as the world’s largest provider of stackable all-in-one distributed ESS solutions, with a market share of 28.6 percent, is just one example of China putting its clean energy ambitions into action.
China’s clean energy sector brought in a record 15.4 trillion yuan (US$2.1 trillion) in 2025, representing around 11.4 percent of national GDP. At a time when geopolitical disruption in the Strait of Hormuz is creating a squeeze on the price of oil, China’s resilience is likely to place the Hang Seng in far greater stead to grow despite an uncertain global economic climate.
China is one of the best-placed nations in the world to handle energy price disruption, and its diversified approach to consumption, as well as the assistance of Russian oil, could see the Hang Seng index become a top destination for stocks to thrive despite persistent economic headwinds.
However, there are some factors that can still dampen the optimistic outlook for Chinese markets. With long-term frailties in the housing market remaining a cloud looming over the economy, and the prospect of China’s aging population creating more economic challenges in the future, it’s worth adopting a cautious approach when looking to Asian stocks.
Despite this, it’s clear that there are plenty of opportunities in clean energy on the Hang Seng index, and its rich array of stocks spanning sectors means that we’re likely to see Chinese markets continue to thrive even as the geopolitical outlook remains uncertain.
