Hong Kong stocks extend winning run as bulls build optimism on Xi-Biden summit, policy easing bets

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Hong Kong stocks rose for a sixth day, the longest winning run in nine months, as China and US leaders explored steps to ease tensions between the world’s two largest economies.

The Hang Seng Index advanced 1.3 per cent to 25,713.78 at the close of Tuesday trading. The six-day gain totalling 3.8 per cent is the longest since February 17. The Hang Seng Tech Index surged 1.7 per cent, with Alibaba Group Holding, Tencent Holdings and Meituan adding 2.2 to 2.7 per cent. China’s Shanghai Composite Index retreated 0.3 per cent.

Macau casino operators Sands China and Galaxy Entertainment were the biggest index gainers in the city, each rising by more than 5 per cent as the city’s chief executive Ho Iat Seng delivered the annual policy address on Tuesday in a boost to the industry. Xinyi Glass was the worst performer with a 5.2 per cent loss.

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President Xi Jinping and Joe Biden held a virtual summit over more than three hours on Tuesday. The Chinese leader called on both sides to “find the right way to get along” and urged his counterpart to return US policy on China to a rational track.

Signs of any improvement in the bilateral ties could remove a geopolitical overhang in the market since the US-China trade war began in 2018 under the Trump administration.

Investors were “awaiting some positive spin to come out of the virtual summit,” said Edward Moya, an analyst at Oanda. “If Biden wants a win, he could ease some of the Trump tariffs.”

Sentiment on Hong Kong and mainland stocks has also improved on speculation policymakers will ease regulatory curbs, especially in the liquidity-stressed property sector, to revive growth. Authorities in several mainland cities have relaxed rules to spur home sales after prices fell by the most in six years last month.

Three companies debuted in mainland China. Suzhou Wanxiang Technology, a maker of consumer electronic components, jumped 206 per cent in Shenzhen. Jiangsu Cai Qin Technology, a telecommunication equipment maker, surged 86 per cent in Shanghai and auto-parts maker Zhejiang Liming Intelligent Manufacturing rallied 44 per cent.

Other major markets in Asia-Pacific were mixed, with benchmarks in Japan inching higher and that in Australia retreating. South Korean equities remained little changed, while US stocks slipped overnight amid a wild swing of Tesla and a surge in government bond yields.

Additional reporting by Cheryl Heng

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