China and Hong Kong stocks rise for third day as US-China trade war shows signs of easing

  • Gains come after China buys more than 1.5 million tonnes of US soybeans, its first big US soybean purchase in six months
PUBLISHED : Thursday, 13 December, 2018, 6:14pm
UPDATED : Thursday, 13 December, 2018, 6:14pm

Major Hong Kong and mainland China stock indexes rose on Thursday to close higher for a third day in a row, amid signs the US-China trade war is easing and the unveiling of plans by Beijing to reduce the tax burden on innovative industries.

In Hong Kong, the Hang Seng Index advanced 1.3 per cent, or 337.64 points, to end at 26,524.35. The Hang Seng China Enterprises Index, also known as the H-shares index, gained 1.3 per cent, or 139.69 points, to 10,556.85. Turnover for the main board reached HK$79.3 billion, an increase of 14 per cent from Wednesday.

On the mainland, the Shanghai Composite Index also rose 1.2 per cent, or 31.90 points, to close at 2,634.05. On the technology-heavy Shenzhen exchange, the Component Index and the Composite Index gained 1.4 per cent and 1.1 per cent to 7,808.04 and 1,360.92, respectively.

The combined turnover for the Shanghai and Shenzhen markets jumped 37 per cent to 304.9 billion yuan.

“The market has stabilised as investors breathe a sign of relief after a number of indications that tensions between the US and China are easing,” said Alvin Cheng, associated director for Prudential Brokerage. “It shows the market is currently driven by news.”

The gains in the stock markets came after China bought more than 1.5 million tonnes of US soybeans, its first big US soybean purchase in six months, according to Reuters.

China is also easing back on the controversial “Made in China 2025” strategy, which was intended to help it gain dominance in key economic areas such as technology and manufacturing. Instead, it plans to replace this strategy with a new one that will seek to increase market access for foreign companies, The Wall Street Journal cited anonymous sources as saying.

The Chinese government will further reduce the tax burden of venture capitalists and angel investors for their investment income from the seed and early-stage hi-tech start-ups they finance, starting January 1, state-run news agency Xinhua reported after Chinese Premier Li Keqiang chaired a State Council executive meeting on Wednesday.

Chinese internet conglomerate Tencent rose 0.6 per cent to HK$318.60 in Hong Kong, after its spin-off music streaming service unit, Tencent Music, closed higher on its Wall Street debut.

Property developers advanced broadly. In Hong Kong, China Resources Land surged 4.5 per cent to HK$31.35, after reporting that its November contract sales had increased by 45 per cent year on year. China Evergrande jumped 3 per cent to HK$25.60, while China Vanke rose 2.9 per cent to HK$27.10.

On the mainland, Poly Developments and Holdings climbed 3.4 per cent to 13.33 yuan. China Fortune Land also gained 2.8 per cent to 28.26 yuan.

Home appliances makers also shined. Midea Group soared 6.3 per cent to 40.12 yuan in Shenzhen, after it announced it had completed almost three-fourths of its share buy-back plan, having bought back 67.73 million shares with 2.94 billion yuan. The company launched a 4 billion yuan share buy-back plan in July, the biggest such plan in the A-share market’s history.

Smaller rival Hangzhou Robam Appliances soared to the 10 per cent limit to 23.17 yuan. Gree Electric Appliances surged 4 per cent to 37.80 yuan. Qingdao Haier and Wuxi Little Swan rose 6.2 per cent and 5.8 per cent to 14.51 yuan and 47.45 yuan, respectively.