SHANGHAI: China stocks rose for a fifth straight session on Wednesday while Hong Kong shares hit near four-year highs, as eased Sino-US trade tensions added fuel to a rally driven by a trillion-yuan hydropower dam project in Tibet and Beijing’s campaign against intense price wars.
Both China’s blue-chip CSI300 Index and the Shanghai Composite Index climbed as much as 0.9% to eight-month highs, before paring gains to end slightly higher.
Hong Kong’s benchmark Hang Seng jumped 1.6% to hit its highest level since late 2021.
In a sign the rally likely has legs, daily turnover in China stocks was near five-month highs on Wednesday, while margin financing - money borrowed to buy stocks - has hit a level not seen in nearly four months.
“External and internal headwinds have subsided faster than expected,” Huatai Securities said in a note to clients, adding that “in the latest round of tariff talks with the US, China has strengthened its hand.”
China’s economy benefits from the government’s stepped-up campaign against ‘involutionary competition’ and positive real estate policies, Huatai added.
In a sign of reduced tensions, US Treasury Secretary Scott Bessent said on Tuesday that US and Chinese officials will meet in Stockholm next week to discuss an extension of the deadline for negotiating a trade deal. “I think trade is in a very good place with China,” Bessent said.
Chinese tech stocks, which are sensitive to Sino-US relations, jumped on Wednesday.
China’s tech-focused STAR50 Index gained 0.5%, while Hong Kong’s Hang Seng Tech Index jumped 2.5%.
Sentiment has been buoyed by bets that steelmakers, coal miners and solar energy firms will benefit from Beijing’s move to cut industrial capacity and rein in deflation, though some stocks in these sectors corrected on Wednesday following recent price surges.
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