China and Hong Kong stocks climbed on Friday on expectations that policymakers will unveil more measures to offset the adverse impact of the trade war on economic growth.
The Shanghai Composite Index jumped 2.5 per cent for its biggest gain in six weeks as trading volumes surged 47 per cent above the 30-day average, according to Bloomberg data. The gauge advanced 4.3 per cent for the week, the best performance for the five-day period since March 2016.
The Hang Seng Index rose 1.7 per cent, extending gains for four straight sessions and completing a weekly gain of 2.5 per cent.
The mainland’s markets will be shut on Monday for a public holiday and Hong Kong’s will be closed the next day.
Chinese investors brushed aside the tariffs on an additional US$200 billion of Chinese goods unveiled this week by Washington to focus on domestic policies. The State Council promulgated guidelines on boosting consumption on Thursday night and the nation’s top planning body pledged this week to put more investment projects in place.
Premier Li Keqiang hinted taxes and social-security levies for companies could be lowered at the World Economic Forum in Tianjin on Thursday.
“The market is anticipating more favourable policies from the Chinese government to counter the negative impact of the trade war,” said Wang Zheng, chief investment officer at Jingxi Investment Management in Shanghai. “After this round of tariffs settles down, we’ll have a period that’s bereft of any further escalation on the trade war front.”
The Shanghai Composite advanced 68.24 points to 2,797.49 on Friday, paring the gauge’s loss in 2018 to 15 per cent. The Hang Seng Index climbed 475.91 points to 27,953.58.
The CSI 300 Index of mainland-traded big-caps rallied 3 per cent, while the Hang Seng China Enterprises Index of Chinese companies trading in Hong Kong added 2.2 per cent.
Consumer and property stocks were among the top gainers as the State Council’s guidelines aim for consumption upgrade in areas of food and living.
Liquor distiller Jiangsu Yanghe Brewery Joint-Stock climbed 6.4 per cent to 124.80 yuan and food seasoning maker Foshan Haitian Flavouring & Food gained 6.3 per cent to 76.30 yuan. China Vanke jumped 7.5 per cent to 25.80 yuan and Future Land Holdings added 5.6 per cent to 28.50 yuan. Great Wall Motor surged 8.4 per cent to 8.03 yuan and Chongqing Changan Automobile rose 7.9 per cent to 7.35 yuan.
Jiangxi Ganfeng Lithium jumped by the 10 per cent daily limit to 32.02 yuan in Shenzhen after signing an agreement with Tesla to supply lithium products to the US maker of electric cars. Main rival Tianqi Lithium surged 7.8 per cent to 39.27 yuan.
In Hong Kong, Geely Automobile Holdings was among the top gainers as the stock climbed 11 per cent to HK$16.58. China Shenhua Energy, the nation’s biggest coal producer, added 6.7 per cent to HK$18.50.
New World Development rallied 5.8 per cent to HK$10.96 after JPMorgan Chase lifted its rating on the stock to overweight from neutral on prospects of improving gearing and earnings.