China, Hong Kong shares extend rally on Tibet dam project boost

SHANGHAI: China stocks climbed to an eight-month high on Tuesday, while Hong Kong shares extended gains to a multi-year peak, driven by construction and power firms after work began on a major dam project in Tibet, billed as the world’s largest.

• China’s blue-chip CSI300 Index climbed 0.4% by the lunch break, while the Shanghai Composite Index gained 0.3%. Hong Kong benchmark Hang Seng added 0.3%.

• The Hang Seng Index rose to 25,120, the highest since November 2021, while the CSI 300 Index touched its strongest point since November 2024.

• Some construction and power stocks extended rallies after China announced over the weekend the start of construction on a $170 billion hydropower dam in Tibet.

• Shanghai-listed Anhui Conch Cement jumped more than 6%, while Power Construction Co. of China hit the daily maximum of 10%.

• “Investors usually don’t care much about the real economy in such a bull market, especially with the rise of their confidence in Beijing’s capability in handling any economic cracks,” said Ting Lu, chief China economist at Nomura.

• Easing U.S.-China tensions, Beijing’s push for long-term funds to invest in stocks and renewed confidence in the country’s manufacturing sector lifted sentiment, Lu noted.

• “However, if stock markets lose steam, investors might shift more attention to the real economy, which will likely face some challenges in the second half of this year,” Lu said.

• Meanwhile, the CSI Banks Index lost 1.1%, while healthcare shares rose 1%.

• U.S. Treasury Secretary Scott Bessent said on Monday that Washington and Beijing would hold talks “in the very near future,” with discussions potentially covering China’s purchases of Iranian and Russian oil.