Hong Kong and Shanghai stocks closed higher for the sixth consecutive session on Monday, amid a general sense of caution as investors looked ahead to the gathering of world leaders at the G20 Summit in Osaka from Friday.
The US-China trade negotiations are expected to resume, with presidents Xi Jinping and Donald Trump planning to meet on the sidelines of the summit.
The Hang Seng Index closed up 0.14 per cent, or 39.29 points higher at 28,513, led up by property stocks, bolstered by expectations for an interest-rate cut next month from the US Federal Reserve.
Low turnover on the main board was seen as evidence of the prevailing caution, with investors trading a total of HK$69.78 billion (US$8.93 billion) worth of shares, the lowest level since last Monday.
Linus Yip, chief strategist at First Shanghai Securities, said while investors refrain from taking aggressive bets ahead of Friday’s summit meeting, the 9.42 per cent loss in the Hang Seng Index in May has reduced selling pressure on blue chips.
“Even if the G20 Summit didn’t yield an immediate outcome of de-escalating the US-China trade war, I’d expect the Hang Seng to move horizontally rather than dropping further, given in May it has dropped quite considerably,” said Yip.
In a separate development on Monday, Vice-Minister of Commerce Wang Shouwen, a top deputy in China’s trade negotiation team, said both Beijing and Washington will need to compromise if they are to reach a trade deal.
“We should meet each other halfway, which means that both sides will need to compromise and make concessions, and not just one side,” Wang said during a press briefing in Beijing.
Wang’s comment came after the US Commerce Department on Friday added five Chinese firms that manufacture supercomputers and their components to its blacklist, effectively barring American firms from selling them technology without government approval.
IN Hong Kong, Henderson Land was up 2.84 per cent to HK$43.45, while Hang Lung Properties gained 2.89 per cent at HK$18.50, and China Resources Land was up 2.36 per cent at HK$34.75.
Selective banks also rose, with China Construction Bank ending 0.3 per cent higher at HK$6.59, and insurer AIA was up 0.18 per cent at HK$82.85.
The Shanghai Composite added 0.2 per cent, or 6.17 points to 3,008.15, led by banking stocks. The index has gained 6.4 per cent from its lows earlier this month.
Industrial and Commercial Bank of China was up 0.51 per cent at 5.88 yuan, Agricultural Bank of China closed up 0.55 per cent at 3.66 yuan, and China Merchant Bank was up 0.72 per cent at 37.96 yuan.
Chinese liquor distillers rose in Shanghai and Shenzhen, with Kweichow Moutai gaining 1.11 per cent at 987 yuan, and Its smaller competitor, Wuliangye Yibin added 1.84 per cent at 115.06 yuan.
The CSI 300, which tracks blue chips listed on both Shenzhen and Shanghai, closed 0.19 per cent, or 7.33 points higher, at 3,841.27. But the ChiNext index, which tracks more volatile tech stocks listed in Shenzhen, dropped 0.61 per cent, or 9.35 points, at 1,514.46.
Yip said he expects the upwards momentum in the Shanghai benchmark to continue, tacking on about 100 points, bringing the index to the 3,100 level, going into the G20 Summit.
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