China, Hong Kong stocks rise on stimulus hopes; trade talks in focus

Credit: REUTERS/CHINA STRINGER NETWORK

China stocks rose on Tuesday as markets re-opened after a week-long holiday, with a dim services sector survey reinforcing hopes Beijing will roll out more stimulus measures.

SSEC +0.8%, CSI300 +1.1%, HSI +0.7%

China services sector growth falls to 7-month low - Caixin PMI

U.S.-China trade deal hopes dim as talks get underway in tense atmosphere

SHANGHAI, Oct 8(Reuters) - China stocks rose on Tuesday as markets re-opened after a week-long holiday, with a dim services sector survey reinforcing hopes Beijing will roll out more stimulus measures.

** Traders, though, turned cautious about trade talks following U.S. President Donald Trump's remarks.

** The CSI300 index .CSI300 rose 1.1%, to 3,857.23, by the end of the morning session, and the Shanghai Composite Index .SSEC gained 0.8%, to 2,929.53.

** The Hang Seng index .HSI added 0.7%, to 25,992.76, while the Hong Kong China Enterprises Index .HSCE gained 1.0%, to 10,246.76.

** China's services sector grew at its slowest pace in seven months in September despite a strong increase in new orders, as operating expenses continued to rise at the end of the third quarter, a private survey showed.

** Services account for more than half of China's economy, providing a key buffer as persistent trade tensions with the United States weigh heavily on the country's manufacturing sector.

** "We continue to be optimistic about the A-share market in the fourth quarter, as there is still room for policy boost which would further lift risk appetite," Orient Securities said in a report.

** Also, certainty has gradually increased that corporate earnings are expected to bottom out in the third quarter, which could provide fundamental support to stocks, the brokerage added.

** Robust consumer spending during the "Golden Week" also helped boost sentiment, sending consumer shares higher.

** Spending on retail goods and dining during the week-long National Day holidays returned to growth this year, offering unexpected respite to an economy that has been expanding at its weakest pace in almost three decades.

** The CSI300 consumer staples index .CSI000912 rose 2% by the lunch break, leading gains among major sectors.

** Focus is also on the developments in Sino-U.S. trade talks.

** Prospects for progress in U.S.-China trade talks dimmed on Monday after Washington blacklisted Chinese companies over Beijing's treatment of predominantly Muslim ethnic minorities, and President Donald Trump said a quick trade deal was unlikely.

** Trump and his top economic adviser, Larry Kudlow, spoke in generally upbeat terms about this week's discussions with China, the first such high-level talks in more than two months, but Trump insisted he would not be satisfied with a partial deal.

** Around the region, MSCI's Asia ex-Japan stock index .MIAPJ0000PUS was firmer by 0.62%, while Japan's Nikkei index .N225 was up 1.02%.

** The yuan CNY=CFXS was quoted at 7.126 per U.S. dollar, 0.31% firmer than the previous close of 7.148.

** The largest percentage gainers in the main Shanghai Composite index were Hunan Fangsheng Pharmaceutical Co Ltd 603998.SS, up 10.03%, followed by Nanjing Huamai Technology Co Ltd 603042.SS, gaining 10.01%, and Zhejiang Jinghua Laser Technology Co Ltd 603607.SS, up by 10.01%.

** The biggest percentage losers in the Shanghai index were Shanghai Film Co Ltd 601595.SS, down 10.01%, followed by Shanghai DZH Ltd 601519.SS, losing 9.98%, and COSCO Shipping Energy Transportation Co Ltd 600026.SS, down by 9.97%.

** The top gainers among H-shares were CSPC Pharmaceutical Group Ltd 1093.HK, up 5.38%, followed by ANTA Sports Products Ltd 2020.HK, gaining 3.25%, and Geely Automobile Holdings Ltd 0175.HK, up by 2.73%.

** The three biggest H-shares percentage decliners were Hengan International Group Company Ltd 1044.HK, which has fallen 0.79%, CRRC Corp Ltd 1766.HK, which has lost 0.7%, and ENN Energy Holdings Ltd 2688.HK, down by 0.7%.

** As of 04:17 GMT, China's A-shares were trading at a premium of 29.74% over the Hong Kong-listed H-shares.

China stock market graphics suite http://reut.rs/1NfkoGl

(Reporting by Luoyan Liu and John Ruwitch; Editing by Subhranshu Sahu)

((luoyan.liu@thomsonreuters.com; Reuters Messaging: luoyan.liu.thomsonreuters.com@reuters.net))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Reuters

Reuters, the news and media division of Thomson Reuters, is the world’s largest international multimedia news provider reaching more than one billion people every day. Reuters provides trusted business, financial, national, and international news to professionals via Thomson Reuters desktops, the world's media organizations, and directly to consumers at Reuters.com and via Reuters TV.

Learn More