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Georgina Lee

China and Hong Kong stocks closed higher Tuesday, as the partial trade deal buoyed investor sentiment and fund managers snapped up strong performers as part of “window dressing” their portfolios before the end of the year.
The CSI 300, which tracks blue chips listed in Shanghai and Shenzhen, closed at an eight-month high, rising 1.4 per cent to 4,041.8. The Shanghai Composite Index closed 1.3 per cent higher, at 3,022.42, a level it had not reached since mid-September.
In Hong Kong, the Hang Seng Index closed 1.2 per cent higher, at 27,843.71.
Financials and tech stocks continued to drive both Chinese indexes higher. Analysts say the
“phase one” trade deal that the US and China agreed on late last week enticed domestic investors in A shares off the sidelines.
Chinese brokerages soak up gains as analysts expect industry to benefit from regulator’s ongoing reforms
“With the rolling back and suspension of trade tariffs by both Beijing and Washington, which is unprecedented in previous rounds of trade talks, investors are hopeful that tech stocks will also benefit as the technology rivalry between US and China could at least temporarily ease up,” said Alvin Cheung, associate director at Prudential Brokerage.
Standard Chartered said in a research note that upon signing of the deal, which is likely to be in January, the cancelled US tariff hike will avert a 0.2 percentage point reduction in China’s GDP growth in 2020. As part of the phase one deal, the US scrapped plans to impose a 15 per cent tariff on US$156 billion Chinese goods originally slated for December 15.
Beijing just made it easier for listed companies to IPO spun off units on domestic exchanges
Liquor distiller giant Kweichow Moutai rose 1.9 per cent to 1,169.98 yuan, People’s Insurance Company (Group) rose 6.4 per cent to 7.64 yuan, while Industrial and Commercial Bank of China advanced 1 per cent to 5.84 yuan.
Driving the CSI 300 index higher in percentage terms were tech stocks: Ganfeng Lithium shot up 10 per cent to 32.14 yuan; Tunghsu Optoelectronic Tech jumped 9.9 per cent to 3.54 yuan, and BOE Technology climbed 8.2 per cent to 4.75 yuan.
Cheung expects the Shanghai Composite to see further upside this week, and it could climb further to 3,100.
In Hong Kong, Tencent was the top gainer on the Hang Seng, rising 3.2 per cent to HK$371.2, marking its highest level since July 30 when it closed at HK$373.2.
Meanwhile, health-care stocks did well: CSPC Pharmaceutical jumped 4.2 per cent to HK$18.36, and and Sino Biopharmaceuticals rose 3.7 per cent to HK$10.68.
“Following the trade deal and Fed rate decision last week, most of the recent uncertainty has been released,” said Alan Li, portfolio manager at Atta Capital.
“Chasing laggards and ‘window dressing’ expectation are boosting market sentiment.” Window dressing is when fund managers add winning stocks to their portfolios to boost their fund’s performance and impress investors.
Outside the blue chips, Alibaba closed 1.4 per cent at HK$203.8 -- its highest level since its listing on the Hong Kong main board on November 26. (Alibaba owns the South China Morning Post.)
Selective stocks with businesses in Macau gained, as investors await more announcements from President Xi Jinping visit, which begins Wednesday. He is expected to confirm recent media reports about Beijing plans for a renminbi stock exchange as part of its move to augment Macau’s offshore renminbi business.
Selective stocks with businesses in Macau rose. Casino operator Sands China gained 1.4 per cent to HK$40.3.
Outside the blue chips, Shun Tak Holdings, which operates ferry services between Hong Kong and Macau, continued its gains into the fifth day and closed 3.3 per cent higher, to HK$4.07, its highest level since August 2015. Pansy Ho Chiu-king, the eldest daughter of “King of Gambling” Stanley Ho Hung-sun, is the managing director of Shun Tak Holdings.
Additional reporting by Deb Price


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“With the rolling back and suspension of trade tariffs by both Beijing and Washington … investors are hopeful that tech stocks will also benefit as the technology rivalry between US and China could at least temporarily ease up,” said Alvin Cheung, associate director at Prudential Brokerage.


China stock market

Tencent Holdings

Alibaba

China’s CSI 300 index rises to eight month high, as mainland investors snap up stocks on improved trade outlook

.css-1mniedq{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;} Alibaba rises to HK$203.8 – its highest level since listing in Hong Kong on November 26 Sands China, other Macau stocks rise in anticipation of visit by President Xi

Alibaba rises to HK$203.8 – its highest level since listing in Hong Kong on November 26

Sands China, other Macau stocks rise in anticipation of visit by President Xi