Chinese stocks have best week since March 2016 as investors cheer policies to boost growth amid trade war

China and Hong Kong stocks climbed on Friday on expectations that policymakers will unveil more measures to offset the adverse impact of the trade war on economic growth.

The Shanghai Composite Index jumped 2.5 per cent for its biggest gain in six weeks as trading volumes surged 47 per cent above the 30-day average, according to Bloomberg data. The gauge advanced 4.3 per cent for the week, the best performance for the five-day period since March 2016.

The Hang Seng Index rose 1.7 per cent, extending gains for four straight sessions and completing a weekly gain of 2.5 per cent.

The mainland’s markets will be shut on Monday for a public holiday and Hong Kong’s will be closed the next day.

Chinese investors brushed aside the tariffs on an additional US$200 billion of Chinese goods unveiled this week by Washington to focus on domestic policies. The State Council promulgated guidelines on boosting consumption on Thursday night and the nation’s top planning body pledged this week to put more investment projects in place.

Premier Li Keqiang hinted taxes and social-security levies for companies could be lowered at the World Economic Forum in Tianjin on Thursday.

“The market is anticipating more favourable policies from the Chinese government to counter the negative impact of the trade war,” said Wang Zheng, chief investment officer at Jingxi Investment Management in Shanghai. “After this round of tariffs settles down, we’ll have a period that’s bereft of any further escalation on the trade war front.”