Chinese and Hong Kong stocks capped their biggest weekly gain in two months, on prospects of an easing in trade tension and further loosening of monetary policies to stem a slowdown in growth. The Shanghai Composite Index added 0.5 per cent to 2,999.60 on Friday, rising 3.9 per cent for the week. The Hang Seng Index rose 0.7 per cent to 26,690.76, advancing 3.8 per cent in the five-day period. Both the gauges posted their best weekly performances since June 21. Trading of derivatives on the city’s exchange resumed in the morning after a software bug triggered a half-day suspension on Thursday, with volumes of the futures contracts spiking. Hong Kong exchange’s website was also hacked on Thursday, said Charles Li Xiaojia, the bourse’s chief executive, at a press conference. The appetite for risk assets improved as China and the US agreed to go back to the negotiating table next month to resolve the trade dispute and Premier Li Keqiang called for a timely use of policy tools, including cuts in banks’ reserve requirement ratios, to stabilise economic growth, at a cabinet meeting this week. A rally in US stocks overnight also boosted sentiment. “The scheduled resumption of the trade talks continues to give the Chinese equity market support,” said Gerry Alfonso, director for international business at Shenwan Hongyuan Group, in Shanghai. Traders will be braced for a busy week next week, when a set of August economic data is due. Goldman Sachs said some of the data, including industrial production and retail sales probably improved, as the front-loading effect of the mid-June online buying spree and the trade war began to wane, and policies were eased further. China’s economic growth slowed to the weakest pace since at least 1992 in the second quarter. ZTE led the gains on the mainland on a news report that China’s second-biggest maker of telecom equipment won a 5G contract in Spain. The shares surged 9.3 per cent to 33.49 yuan for the steepest gain since April, with volumes surging to more than three times the 20-day average. Its Hong Kong-traded stock jumped 8.5 per cent to HK$21.25. “Overseas expansion is one of the key issues for the company,” said Shenwan’s Alfonso. “Europe is a very important market for a lot of large Chinese tech companies and getting some contracts over there is something that equity investors are really looking for.” Hong Kong’s Hang Seng Index erased some of the intraday gain of as much as 1 per cent after Fitch Ratings cut the city’s credit worthiness as an issuer of long-term foreign currency debt to AA from AA+ with negative outlook. The downgrade, the first since 1995, was because of the city’s recent political turmoil, the rating agency said. Meanwhile, Citigroup lowered its growth forecast for the city’s economy for a fourth time this year, slashing growth projection for 2019 to 0.6 per cent and that for next year to 1.4 per cent, citing the “visible damage” caused to the retail and tourism sectors. Traders in Hong Kong rushed to the derivatives markets on Friday after trading was halted for the first time in history a day earlier. More than 160,000 futures contracts on the Hang Seng Index changed hands, 16 times the average daily volume this year. A total of 60,070 such contracts were traded on Thursday before the suspension in the afternoon. China property manager A-Living Services shot up 8.3 per cent to HK$17.30, a record close. The company said in an exchange filing that it had started a preliminary negotiation about possible acquisition of a stake in CMIG Futurelife Property Management, a private investment group in China.