Hope for progress in trade talks leads to gains for Hang Seng, mainland China benchmarks

Deb Price

A surge in optimism about coming high-stakes US-China trade talks led to gains in both Hong Kong and mainland markets Thursday.

The Hang Sang eked out teensy gains, closing up 0.1 per cent at 25,707.93, largely over the trade talks that begin in Washington tonight.

The big winner of the day in Hong Kong was fresh face 360 Ludashi, a Chinese software developer that closed up a whopping 218.5 per cent at HK$8.6 from its initial public offering price on its first day of trading.

The Shanghai Composite Index closed up 0.78 per cent to 2,947.71.

Also boosting trading sentiment was a report by The New York Times that the US will soon give some US companies licenses to supply non-sensitive goods to China telecom giant Huawei, which was put on a US trade blacklist.

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Every sector on the Shanghai Composite Index rose, with the biggest gains posted by health care and information technology stocks. Overall, 1,201 stocks gained, while 257 fell and 73 were unchanged, and 15 stocks hit or nearly hit the 10 per cent upside limit.

Among stocks popular with northbound Stock Connect traders, Kweichow Moutai gained 0.7 per cent to 1,155 yuan; China Merchants Bank closed down 0.2 per cent to 35.11 yuan; Shanghai International Airport rose 3 per cent to 80.48 yuan, and Ping An Insurance rose 0.55 per cent to 91.05 yuan.

Two Chinese surveillance camera makers put on a trade blacklist by the US over alleged abuse of Muslim minorities in the country ended down.

Hangzhou Hikvision Digital Technology lost 4.33 per cent to 30.90 yuan, while Zhejiang Dahua Technology dropped 5.79 per cent to 16.27 yuan.

“At the beginning of the day, the market was a bit depressed because the sentiment surrounding the US-China trade wars was not so good, as news had it that China could finish their talks one day earlier,” Tse said.

“But then Trump gave some way to Huawei and allowed it to continue to buy US parts. This sent a signal to the market that if the US was willing to take a step back, there may be improved sentiment during the trade talks tonight.”

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In Hong Kong, AAC Technology Holdings, a supplier to Huawei and Apple, shot up 6.3 per cent to HK$44.60.

Pork producer WH Group closed up nearly 4 per cent to HK$7.33. According to a Bloomberg story, Arnold Silver of WH Group’s Smithfield Foods said next year could see ham and pork belly shortages as China buys more pork as it reels from African swine fever.

Sanitary napkin and diaper maker Hengan International – which has been facing stiff competition at home from international rivals – closed ahead 3.6 per cent at HK$50.95. J.P. Morgan upgraded it to neutral from underweight on Wednesday, with a price target of HK$49.

China Mengniu Dairy finished up 2.3 per cent at HK$31.05, following its announcement it is cutting commercial ties with the NBA over the controversy set off by a team manager’s tweet in support of Hong Kong protesters.

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Budweiser Brewing APAC fell 3 per cent to HK$31.50. But that left it up nearly 17 per cent from its trading debut just over a week ago on September 30.

Topsports International Holdings also joined Hong Kong’s main board on Thursday. It closed at HK$9.25, rising nearly 9 per cent from its IPO price of HK$8.50.

Some protest-hammered stocks got a break, though not MTR – the owner of the city’s subway – which closed down 1.16 per cent at HK$42.70 after being in positive territory earlier.

Cosmetics retailer Sa Sa International finished up 0.59 per cent to HK$1.72, while jeweller Chow Sang Sang rose 2.16 per cent to HK$8.51.

“Traders in Hong Kong are becoming numb to the impacts of the protest,” said Kingston Lin King-ham, director of securities brokerage AMTD.

This article Hope for progress in trade talks leads to gains for Hang Seng, mainland China benchmarks first appeared on South China Morning Post

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