Hong Kong stocks pare weekly losses as investors hope for trade truce

The Hang Seng Index bounces back on Friday, but still posts weekly loss

PUBLISHED : Friday, 06 April, 2018, 11:15am
UPDATED : Friday, 06 April, 2018, 6:19pm

Hong Kong stocks recovered on Friday, paring weekly losses, after Wall Street stabilised as investors weighed the possibility the US and China might eventually strike a truce in their escalating trade conflict.

Still, the main stock index ended the holiday-shortened week lower by 0.8 per cent, posting a third straight week of losses.

The mainland Chinese stock market remained closed on Friday for a public holiday.

The Hang Seng Index advanced 1.1 per cent, or 326.25 points, to close Friday at 29,844.94.

The benchmark tumbled 2.2 per cent on Wednesday, when China announced tit-for-tat tariffs worth US$50 billion on US imports, stoking fears of an all-out trade war.

The Hong Kong market was closed on Thursday for the Ching Ming holiday, when US President Donald Trump said he had instructed his trade officials to consider US$100 billion in additional tariffs on Chinese imports.

But both countries have signalled that there is some wiggle room, indicating they are willing to talk and work out their differences before the tariffs are put in place.

US equities closed higher overnight following a wild trading session on Wednesday. The Dow Jones Industrial Average rose 1 per cent to 24,505. The S&P 500 index gained 0.7 per cent to 2,663, and the Nasdaq Composite Index added 0.5 per cent to 7,077.

“Investors are selecting the stocks to buy on dips because there is still a consultation period before US tariffs will be implemented,” said Linus Yip Sheung-chi, chief strategist at First Shanghai Securities.

“These numbers [tariffs] are getting big now, and a lot depends on whether China will respond with the same tariff increase, which would indicate negotiations are still not finished.”

Trade-offs or trade war? China ‘could be forced to compromise’ with the US

On Friday, the Hang Seng China Enterprises Index, known as the H-share index, gained 0.9 per cent, or 110.25 points, to 11,967.66.

The average daily turnover for the main board decreased to HK$108 billion this week, down 22 per cent from the previous week.

Chinese internet giant Tencent Holdings snapped a four-day losing streak, rising 2.1 per cent to HK$405.80. Smartphone component makers Sunny Optical Technology and AAC Technologies gained 3.5 per cent and 2.1 per cent, respectively, to end at HK$143.00 and HK$137.40.

Brilliance China Automotive Holdings surged 6.9 per cent to HK$17.64, after Morgan Stanley predicted the stock to rise in the next couple of weeks on the back of the anticipated strong sales of the new BMW X3 model.

Export-reliant stocks were weak. Johnson Electric Holdings sank 5 per cent to HK$28.55. Minth Group declined 4.9 per cent to HK$34.90.

Among other market movers, China Construction Bank advanced 1.5 per cent to HK$7.93, Ping An Insurance rose 0.7 per cent to HK$79.50, and HSBC Holdings was 0.9 per cent higher at HK$73.05.