SHANGHAI: China stocks were mixed, while Hong Kong shares closed higher on Monday as anticipation ahead of a summit between the top leaders from the world’s two largest economies later this week lifted risk sentiment.
The blue-chip CSI 300 Index was down 0.2%, while the Shanghai Composite Index closed 0.3% higher.
Hong Kong’s Hang Seng Index rose 1.3% and the Hang Seng China Enterprises Index climbed 1.5%.
US Treasury Secretary Janet Yellen said on Friday that she agreed with Chinese Vice Premier He Lifeng to “intensify communication” on economic issues.
The comment came in ahead of a scheduled meeting this week between US President Joe Biden and his Chinese counterpart Xi Jinping in San Francisco.
Gavekal Dragonomics said geopolitical risks have retreated as China and the US resume working- and leadership-level contacts, “but the shift in policy direction, while welcome, still awaits confirmation that the economy is actually getting onto a firmer footing.” ** Tech giants listed in Hong Kong jumped 2.3%.
Investors are closely monitoring a slew of China’s economic data to be released this week, including industrial output, urban investment and retail sales for October. Early indicators are that growth momentum weakened again in October following a tentative rebound in previous months.
“The debate on investing in China has shifted profoundly towards long-term structural challenges particularly on debt and deflation fronts, and should continue well into 2024,” Morgan Stanley strategists wrote.
“As a result, the hurdles ahead to a sustainable China equity market recovery are still high, with mounting macro pressure on earnings coupled with currency weakness.”
Chinese property developers lost 0.7%, with ratings agency Moody’s warning that “China’s prolonged property market downturn will have adverse spillover effects amid slowing economy.”
Aerospace defence shares advanced 3.1%, while computer stocks rose 2.1%.
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