Stocks close mixed in Hong Kong and China amid mixed messages on progress of negotiations to end the ongoing US-China trade war
- After the Hang Seng lost 680 points over past four days, investors squared their short positions among selective financial blue chips
- Chinese benchmarks were mixed, as oil and tech stocks capped Shanghai Composite gains. The main gauge on the technology-heavy Shenzhen exchange fell
Hong Kong’s benchmark stock index rose, closing higher for the second day this week as investors squared off their short positions amid mixed messages emanating from the Trump administration on how talk are proceeding to resolve the trade war with China.
The Hang Seng Index rose 0.3 per cent, or by 86.8 points to 27,353.93 at the close, while the China Enterprises Index advanced 0.4 per cent to 10,445.54.
Stocks were mixed on the mainland Chinese stock markets, with Shanghai’s Composite Index rising 0.02 per cent to 2,852.99 while the Shenzhen Composite Index declined 0.5 per cent to 1,496.03.
The CSI 300, which tracks blue chips listed on the Shanghai and Shenzhen bourses, rose 0.3 per cent, or by 9.94 points, to 3,593.91.
“The mixed messages from recent news flow about the US and China trade war negotiations led investors to think that over the short term, a resolution between the two governments is unlikely,” said Linus Yip, chief strategist for First Shanghai Securities.
Adding to the uncertainty was a tweet on Thursday by US President Donald Trump, which said that Huawei Technologies could be included “in some form of, or some part of” a trade deal with China.
That tweet contradicted previous statements by senior members of Trump’s own trade delegation, including US Trade Representative Robert Lighthizer, who has sought to keep trade and national security matters separate during the negotiations.
Oil and technology stocks capped gains on the Shanghai exchange, with 360 Security Tech declining 2.9 per cent to 20.88 yuan, while PetroChina dropped 0.6 per cent to 7.16 yuan. A gain by Kweichow Moutai, the world’s largest liquor distillery and the fourth-largest stock on the benchmark kept the Composite Index in positive territory. Moutai rose 2 per cent to close at 878.5 yuan.
Over the past three to four weeks, the Shanghai Composite Index has been trading in the range of between 2,840 and 2,920, and he expects the benchmark to continue trading within that range next week, said Yip.
Technology companies and manufacturers on the technology-heavy Shenzhen Composite Index led declines.
JPMF Guangdong Company, which makes permanent magnets, fell 7 per cent to 5.99 yuan. Beijing Dabeinong Technology Group, which produces animal feed, fell 5.6 per cent to 5.24 yuan.
Investors stopped putting capital into the Hong Kong stock market this week, pushing turnover on the city’s bourse to a five-day low of HK$76 billion.
“The market is dominated primarily by bearish investors,” said Alex Wong, director of Ample Finance Group, adding that whatever buying seen in the market is by traders covering their short positions. “If
there is no further positive news flow over the weekend, I expect the Hang Seng Index to face downside pressure on Monday.”
Leading the Hang Seng higher was the insurer AIA, advancing 0.7 per cent to HK$75.45. Ping An Insurance was up 0.7 per cent at HK$83.8. Geely Automobile Holdings, China’s largest private carmaker and the biggest shareholder of Daimler, rose 2.3 per cent to HK$12.46. It was the third straight week of declines for the Hang Seng, wrapping up the week by losing 2.1 per cent.