China’s stocks sustain rally after vaulting past US$10 trillion mark, Hong Kong cancels trading on typhoon warning

The Shanghai Composite Index reversed loss to sustain a rally that pushed the market past the US$10 trillion mark for first time since 2015

Hong Kong cancelled trading in stocks, derivatives after the Observatory raised typhoon warning level to the third highest early Tuesday

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Chinese investors monitor stock prices at a brokerage house in Beijing, China. The market ekes out a small gain after surpassing the US$10 trillion mark on October 12, 2020. Photo: AP

Published: 10:43am, 13 Oct 2020Updated: 4:09pm, 13 Oct 2020

China’s stocks edged up, extending the gain from the biggest rally in three months, as investors assessed the strength of the nation’s economic recovery and the prospect of more US stimulus packages. Hong Kong cancelled trading in stocks and derivatives due to a typhoon warning.

The Shanghai Composite Index added less than 0.1 per cent to 3,359.75, as a late rally lifted stocks out of earlier losses. The momentum remained intact after a 2.7 per cent gain on Monday, spurred by optimism President Xi Jinping will unveil further reform measures in his trip to Shenzhen to mark the 40th anniversary of the special economic zone bordering Hong Kong.

Strong buying over the past two trading days helped lift the combined value of the companies listed on the Shanghai and Shenzhen exchanges beyond the US$10 trillion mark on Monday for the first time since 2015. That ranked it the world’s second-largest equity market after the United States.

Other markets in Asia were mixed on Monday as the US made no progress on ending the stalemate of a new round of stimulus measures. Members of the House were told not to expect any action this week and many Senate Republicans rejected the White House proposal for a deal.

Meantime, the Johnson & Johnson halted its clinical trial of the vaccine for Covid-19 due to an unexplained illness in an experimental patient.

China’s exports grew by faster-than-expected 8.7 per cent, while imports increased 12 per cent, beating the estimate of 1 per cent growth. Other economic data in the coming week will provide more clues on the sustainability of China’s recovery from the damage caused by the pandemic. Third-quarter economic growth, of which consensus signals a faster recovery, is due on October 19.

“China’s economy will continue the recovery,” said Min Liangchao, a strategist at HSBC Jintrust Fund Management in Shanghai. “Growth in industrial production is expected to stabilise and consumption of the service industry is likely to improve further.”

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