SHANGHAI: China stocks closed at 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 ended 0.8% higher, while the Shanghai Composite Index gained 0.6%. Hong Kong benchmark Hang Seng added 0.5%.
The Hang Seng Index rose to 25,130, 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 and Power Construction Co. of China both 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 US-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 Coal Index surged nearly 7%, while liquor shares rose more than 3%.
US 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.
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