SHANGHAI: China and Hong Kong stocks finished Thursday at one-month closing highs, recovering ground lost since US President Donald Trump announced steep tariffs in early April, as Beijing’s rate cuts and stimulus measures helped calm trade concerns.
China’s blue-chip CSI300 Index climbed 0.6%, while the Shanghai Composite Index gained 0.3%. In Hong Kong, the benchmark Hang Seng Index rose 0.4%, marking a six-day winning streak.
China cut its policy rate by 10 basis points on Thursday, part of a package of measures aimed at buttressing an economy bruised by the crushing Sino-US trade war. Other policies announced on Wednesday include reducing the amount of cash that banks must hold as reserves, and efforts to stabilize financial and property markets.
“Not only are these helpful in smoothing market volatility and shoring up investor confidence at stressed times, but they are also showcasing the authorities’ commitment to stabilize investors’ price and wealth-effect expectations,” Goldman Sachs wrote in a note. The Wall Street bank nudged up its 12-month index target for CSI300 to 4,400 points, 14% higher than the current level.
Goldman expects “the effective US tariff rate on Chinese imports to fall to around 60% from about 160% relatively soon.”
US Treasury Secretary Scott Bessent and US Trade Representative Jamieson Greer will meet with China’s economic tsar He Lifeng on Saturday in Switzerland, moving toward potential negotiations over trade disputes.
“Market uncertainty is abating, and risk appetite is growing,” Dongxing Securities wrote. But the brokerage warned of volatility ahead as the trade war’s economic impact on China will likely deepen.
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