SHANGHAI: China stocks ended higher on Wednesday after a volatile session, with gains in photovoltaic and new energy shares offsetting jitters after a sharp overnight sell-off on Wall Street.
CEOs of Wall Street heavyweights Morgan Stanley and Goldman Sachs on Tuesday cautioned that equity markets could be heading toward a drawdown, underscoring growing concerns over sky-high valuations and evoking memories of the dot-com boom and crash.
The Shanghai Composite index ended up 0.23 percent at 3,969.25 points after falling nearly 1 percent earlier in the session. The blue-chip CSI300 index closed 0.19 percent higher. Both have posted year-to-date percentage gains in the upper teens, driving largely by the same tech and AI fervour that has seen many other global bourses hit multi-year or record highs.
The day’s recovery was led by photovoltaic shares, with a sub-index tracking the industry jumping 4.31 percent. Meanwhile, CSI New Energy index leapt 3.24 percent.
Hong Kong shares also trimmed early losses, with the benchmark Hang Seng Index down 0.07 percent at close, while the city’s tech index lost 0.56 percent.
“The lack of a single clear catalyst suggests that investor caution is being driven by a combination of macroeconomic uncertainties, including concerns about growth prospects, ongoing government shutdown negotiations in the US, and heightened scrutiny of capital expenditure in key industries,” said Shier Lee Lim, lead forex and macro strategist for APAC at Convera.
Some traders said sentiment was also aided after Beijing confirmed that China will suspend retaliatory tariffs on US imports following last week’s meeting of their two leaders, including lifting duties on farm goods, but imports of US soybeans will still face a 13 percent tariff.
Chinese Premier Li Qiang said trade restrictions have created barriers to doing business and that Beijing would work to reform the global economic and trading system and make trade rules fairer, more reasonable and transparent.
Around the region, MSCI’s Asia ex-Japan stock index was weaker by 0.83 percent, while Japan’s Nikkei index closed down 2.5 percent.
Separately, market participants will shift their attention to China’s economic data for more clues on the health of the economy.
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