H1 2025 Market Recap: Gold, Europe, and Hong Kong Shine

TradingKey - The first half of 2025 delivered a mixed bag for global asset markets—but three names stood out clearly at the top: gold, European equities, and Hong Kong’s Hang Seng Index.

Gold led the way with a 23% gain, acting yet again as a safe-haven favorite. European stocks followed closely, up nearly 21%, fueled by valuation recovery and fresh capital inflows. Meanwhile, the Hang Seng Index surged around 20%, powered by a sharp rebound in tech and new economy names.

Each of these markets had unique factors working in their favor:

Gold: Geopolitical Stress + Policy Uncertainty = Flight to Safety

The rally in gold has been all about safety—and for good reason. Ongoing geopolitical tensions such as the Russia-Ukraine war, shipping disruptions in the Red Sea, and renewed India-Pakistan standoffs have kept global markets on edge.

On top of that, slower economic growth, sticky inflation, and mixed signals from central banks have made investors more cautious. That’s sent money flowing into tried-and-true safe havens—gold being the top pick. Real interest rates have stayed low, the U.S. dollar has softened, and gold’s appeal as a hedge against both volatility and inflation has only grown stronger this year.

Europe Stocks: From Discount to Comeback Story

European equities have delivered one of the strongest comebacks in global markets, thanks to a mix of macro strength and a technical rebound. The euro has strengthened meaningfully against the dollar, making euro-denominated assets more attractive to global capital.

At the same time, the European Central Bank’s more dovish tone and generous fiscal support across the region have helped lift sentiment. Germany’s DAX gained over 20%, while markets in France and the UK also saw solid performance. Banking stocks led much of the rally, giving eurozone stocks an added tailwind. With earnings expectations improving and valuations still below U.S. peers, investors are seeing Europe as a relative value play that’s finally starting to pay off.

Hong Kong Stocks: The Return of Tech and “New China”

Hong Kong’s market came roaring back in the first half of the year. The Hang Seng Index posted a 20% gain, driven mainly by renewed interest in tech and innovation-led sectors. A wave of southbound money from mainland China helped fuel the momentum, while big-name tech stocks like Xiaomi, NetEase, Kuaishou, Alibaba, and Tencent posted gains north of 20%—some more than 50%.

What’s behind the comeback? Investors are getting excited again about AI, biotech, and other “new economy” stories. Compared to A-shares, Hong Kong stocks offer lower valuations, greater international transparency, and easier access for global institutions. That makes the Hong Kong market an increasingly attractive play for long-term capital.

Don’t Count Out the U.S.: Nasdaq Hits New Highs

While the broader U.S. equity market underperformed its European and Asian peers, the Nasdaq continued to break records in H1 2025. The index was powered by continued strength in AI, chipmakers, and biotech. Tech leaders like NVIDIA, Apple, and Microsoft extended their rallies and remained key drivers of performance.

Analysts are still firmly bullish on growth tech. As AI adoption accelerates and digital spending expands globally, the Nasdaq continues to represent one of the most compelling ways to play these themes. Volatility remains part of the game, but for those focused on long-term innovation, the Nasdaq remains the place to be.

The Bottom Line

For investors, the takeaway is clear: diversification across these key themes—defensive assets like gold, value regions like Europe, and innovative growth stories in Asia and the U.S.—can offer the right balance of upside potential and downside protection heading into a more uncertain second half of the year.

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