Hong Kong stocks traded near a three-week high as investors weighed the prospect of stimulus measures from Beijing against the backdrop of heightened trade tensions.
The Hang Seng Index rose 0.4 per cent to 19,819.62 as of 11.18am local time after falling as much as 0.7 per cent. The Hang Seng Tech Index climbed 0.5 per cent. The CSI 300 Index added 0.1 per cent and the Shanghai Composite Index advanced 0.2 per cent.
Online travel agency Trip.com Group rallied on optimism about the business outlook after China’s recent expansion of the list of visa-free countries. Semiconductor Manufacturing International Corp (SMIC) rallied on expectations about rising demand for domestic chips after China’s state-backed industry associations called for the shunning of US chips. Property developer New World Development (NWD) slid on concerns about corporate governance following the replacement of its CEO.
China plans to restrict exports to the US of minerals that are crucial to technology and military use, the Ministry of Commerce said on Tuesday. The list includes gallium, germanium and graphite, which are vital for both military and civilian applications. The ban came just a day after the Biden administration announced restrictions on exports of cutting-edge chipmaking equipment and materials that are essential for the development of artificial intelligence technology.
The US condemned Beijing’s move and said it would take “necessary steps” to prevent further “coercive” measures.
“Expect increased market volatility in [the first half of 2025] as the US embarks on another round of trade rebalancing with China via higher tariffs,” brokerage firm UOB Kay Hian said in a strategy report on Wednesday. “We expect China to roll out growth supportive policies on top of the de-risking measures that have been announced.”
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