China stocks rise, HK lower as investors await trade talk details

HONG KONG: China stocks ended higher on Tuesday as a new round of Sino-US trade talks continued, while the Hong Kong benchmark declined with some investors booking profits near the month-end.

China’s blue-chip CSI300 Index and the Shanghai Composite Index reversed morning session’s losses, closing up 0.39% and 0.33%, respectively.

Hong Kong benchmark Hang Seng dropped 0.34%, while Hang Seng Tech fell 0.35%.

Market sentiment cooled slightly as investors awaited details from the ongoing US-China trade talks that started on Monday in Stockholm.

China faces an August 12 deadline to reach a durable tariff agreement; both China and US are expected to push for an extension of the trade truce.

“A truce extension would calm markets... a confrontational tone or vague outcomes could reignite fears of renewed tariffs down the line, resulting in a risk-off sentiment,” Charu Chanana, Saxo chief investment strategist, said in a note on Tuesday.

Hong Kong stocks struggled for direction in the past few sessions after the Hang Seng hit its highest level since November 2021 last week.

“Most likely, people are taking some money off the table before the Hang Seng Index futures that expire tomorrow (to book gains),” said Steven Leung, executive director at broker UOB Kay Hian.

Healthcare extended their rally to lead gains, with Hong Kong-listed healthcare stocks jumping 3.8%, biotech companies listed in mainland A-shares advancing 3%.

China’s announced measures to boost birthrate through an annual childcare subsidy of 3,600 yuan (about $500) until age three, but markets reacted relatively mutely.

Infant formula maker Beingmate and China Feihe rose 3.5% and 0.4% respectively, while Jinxin Fertility went down 4%.

“As the subsidy is relatively small, we don’t think the birth rate will significantly increase in coming years,” Ting Lu, Nomura chief China economist, said in a note.

Smaller Shenzhen index ended up 0.46% and the start-up board ChiNext Composite index was higher by 1.862%.