China, HK stocks close down as US-China call offers no clear progress on trade

SHANGHAI: China and Hong Kong stocks ended slightly lower on Friday, as investors remained cautious after a call between US President Donald Trump and Chinese leader Xi Jinping failed to provide clear signals of progress in easing trade tensions.

Trump and Xi confronted weeks of brewing trade tensions and a battle over critical minerals in a rare leader-to-leader call on Thursday, leaving key issues unresolved for future talks.

“If you look at the conversation between Chinese and US presidents, there’s nothing concrete that’s positive. So little impact on stocks,” said Guo Jianwen, partner at Shanghai-based hedge fund Haiyi Capital.

China’s blue-chip CSI300 Index fell 0.1%, while the Shanghai Composite Index was flat. Hong Kong benchmark Hang Seng Index dipped 0.5%.

For the holiday-shortened week, the CSI 300 Index gained nearly 1%, while the Hang Seng Index rose 2.2%.

“The only good news is that things are not getting worse,” said William Xin, chairman of Shanghai-based hedge fund Spring Mountain Pu Jiang Investment Management.

“If Trump can come to China for a visit in the short term, that would be hugely positive.” Chinese markets have lacked clear direction since April 2, when Trump unveiled sweeping reciprocal tariffs, raising fears of a global trade disruption.

The blue-chip CSI300 Index has barely budged from the April 2 level, and Hong Kong’s benchmark Hang Seng Index gained less than 3% during the period, both lagging the recovery seen among major global markets.

Investors should not over-interpret the talk as both sides are still struggling to adapt to each other in a broad confrontational trend, said Charles Wang, chairman, Shenzhen Dragon Pacific Capital Management.

Wang said the most significant takeaway from the leaders’ exchange was Xi’s warning to Trump against provocative actions on Taiwan, which he interpreted as a signal that Beijing is not preparing for a near-term military move.

Chinese tech American Depositary Receipts (ADRs) rose just 0.85% in New York overnight following the call, while tech majors listed in Hong Kong fell 0.6%.

Onshore non-ferrous metal shares gained 1.1%, and materials stocks listed in Hong Kong jumped 2.4%.