SHANGHAI: Mainland China stocks ended marginally higher on Tuesday, reversing earlier losses, as investors anxiously awaited potential US-Iran peace talks to ease tensions in the Middle East and relieve a global energy supply shock.
The US expressed confidence that peace talks with Iran would go ahead in Pakistan thisweek, and a senior Iranian official said Tehran was considering joining, as the end of a two-week ceasefire loomed.
China’s benchmark Shanghai Composite index inched higher by 0.07 percent, while the blue-chip CSI300 Index rose 0.22 percent.
Coal-related shares led the gains, with a sub-index tracking the industry rising 2.54 percent.
China might have to burn more fossil fuels this year as meteorologists forecast a moderate-or-stronger El Nino weather event in the summer and autumn, which could disrupt operations at hydropower stations across the region at a time when fuel supplies from the Middle East are disrupted.
In Hong Kong, the benchmark Hang Seng Index advanced 0.48 percent.
“We see about 5-10 percent upside for Chinese equities towards year-end with a few positive developments shaping up; however, near-term volatility remains high,” analysts at Morgan Stanley said in a note this week.
“We also expect the path to remain choppy in the near term with volatility persisting through May to July, given uncertainty around the US-China presidents’ meeting, first-quarter earnings season, IPO shares unlocking as well as the ongoing Middle East situation.”
Separately, shares of Chinese circuit board maker Victory Giant Technology jumped 60 percent in their Hong Kong debut on Tuesday, after raising HKD20.1 billion in a share sale in the city’s biggest listing in about seven months.
Hong Kong carrier Cathay Pacific aims to raise about HKD2 billion through a one- or two-tranche fixed-rate Hong Kong dollar bond, sources told Reuters.
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