The Shanghai Composite Index closed at its highest level in 10 weeks, as investment sentiment was buoyed by US president Donald Trump’s decision to delay tariffs for two weeks as a “gesture of goodwill” for celebrations marking the 70th anniversary of the founding of the People’s Republic of China.
The Shanghai benchmark ended 0.7 per cent higher, at 3,0312.4.
The CSI 300, which tracks Shenzhen and Shanghai blue chips, rose 1.1 per cent to 3,972.38. Financials and consumer stables led the indexes higher.
In Hong Kong, the mood was less upbeat. The Hang Seng Index lost 0.3 per cent, closing at 27,087.63, as selective properties and the news of the takeover bid launched by the Hong Kong Exchanges and Clearing (HKEX) weighed on the index.
Trump said Wednesday he will delay a planned tariff hike for two weeks to avoid escalating trade tensions on China’s National Day on October 1.
That came a day after Beijing unveiled a list of 16 types of products that will be exempt from the first round of China’s additional tariffs on US imports. The two sides are set to meet for another round of high-level trade negotiations early next month.
“Investors are hopeful that the upcoming trade negotiations between Chinese and US officials in October in Washington will bring the two sides closer to a deal,” said Kenny Tang, chief executive of Royston Securities.
Leading gains in Shanghai were financials, with Ping An Insurance up 3.1 per cent at 92.34 yuan, and China Life Insurance up 1.8 per cent to 29.8 yuan. People’s Insurance Company (Group) rose 2.8 per cent to 9.42 yuan.
Improved August profits reported by some of the Chinese brokerages also supported the sector, said Tang. Haitong Securities jumped 5.6 per cent to 16.54 yuan, while Citic Securities rose 1.3 per cent to 24.71 yuan.
Elsewhere, liquor distiller stocks rebounded from the previous session’s losses.
Shanghai-listed Kweichow Moutai rose 2.8 per cent to 1,099 yuan. In Shenzhen, Wuliangye Yibin finished up 1.8 per cent at 131.55 yuan. They both topped their respective exchanges as the most traded stocks in turnover terms.
But in Hong Kong, the proposed takeover by HKEX stole investors’ attention away from trade issues.
Investors were not happy with the Hong Kong bourse operator’s proposed unsolicited US$36.6 billion bid to take over the London Stock Exchange.
Citigroup on Wednesday cut the exchange operator’s rating to “sell” from “buy” with a new target of HK$210 a share, saying the high offer could weigh on HKEX’s shares in the near term, Bloomberg reported.
Selective properties pulled back from the previous day’s gains.
Henderson Land ended down 1.5 per cent at HK$38.2, Sun Hung Kai Properties finished down 0.8 per cent at HK$116.9, and Link Reit closed down 1 per cent HK$89.1.
The losses in properties came as ongoing protests in the city, now in its third month, tanked August tourist arrivals by 40 per cent. But some analysts, such as Tang, see Hong Kong properties as attractive and do not expect their falls to continue.
“Many of the Hong Kong property landlords and developers are trading at a discount to net asset value at 30 per cent. Their dividend yields are still attractive, at 6 per cent. At current levels, their share prices have already reflected the impact that the Hong Kong protests have on their businesses,” said Tang.
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