SHANGHAI: China stocks ended the week lower, paring earlier gains, after touching a decade-high this week, as investors booked profits following a US-China trade truce and shifted their focus to domestic corporate earnings and economic fundamentals.
US President Donald Trump said on Thursday he had agreed with President Xi Jinping to trim tariffs on China in exchange for Beijing cracking down on the illicit fentanyl trade, resuming US soybean purchases and keeping rare-earths exports flowing.
The blue-chip CSI300 Index closed 1.5 percent down on Friday, while the Shanghai Composite Index lost 0.8 percent. Hong Kong benchmark Hang Seng was down 1.4 percent.
“The kind of reaction has become of a habit in China’s stock market: good news comes out, and prices dip,” said Zeng Wenkai, chief investment officer at Shengqi Asset Management Co.
“Still, we’re staying positive. The 4,000-point level might get tested a few more times, but the overall trend is still pointing up.”
The benchmark Shanghai Composite Index rose above the psychologically-significant 4,000 level for the first time in 10 years this week, after US and China officials hinted a trade framework last Sunday that buoyed sentiment.
The CSI300 Index was down 0.4 percent this week, while the Hong Kong Index was down 0.8 percent.
For October, Hong Kong stocks underperformed their mainland peers, dropping more than 3 percent and marking their first monthly decline since April.
“This (US-China) is a pause button deal, not a reset button: it helps repair market sentiment and eases tariff burdens on the real economy, but it doesn’t signal a turn in structural tech decoupling,” said Li Hao, research director at Beijing-based Cypress Fund.
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