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STOCKS-MARKETS-CHINA-HONGKONG
China, HK stocks up more than 2% after US trade truce
SHANGHAI, Dec 3, 2018 (BSS/AFP) – Chinese and Hong Kong stocks opened more
than two percent higher on Monday and the yuan strengthened after Washington
and Beijing announced a truce in their escalating trade war.
The benchmark Shanghai Composite Index surged 2.24 percent, or 58.04
points, to 2,646.23, while the Shenzhen Composite Index, which tracks stocks
on China’s second exchange, rose 2.55 percent, or 34.15 points, to 1,371.89.
Hong Kong’s main index climbed 2.02 percent, or 535.64 points, to
27,042.39.
The Chinese yuan gained 0.43 percent to 6.9306 per dollar.
The US and Chinese presidents agreed in a meeting at the G20 on Saturday
to suspend any new tariffs in the escalating trade war between the world’s
two largest economies, which has weighed on world markets.
“The better-than-expected outcome should help reduce near-term uncertainty
and improve market sentiment,” Wang Tao, head of China economic research at
UBS AG in Hong Kong, said in a research note.
But analysts have already issued warnings that tough negotiations still
lie ahead before the core trade disputes are resolved.
“We are not yet at that happy outcome as the latest agreement does not
undo all of the harm already in place,” Wang said.
“Increases in tariffs have large negative effects, while resolution does
not undo the harm completely as economies have difficulty bouncing back from
the structural changes induced by tariffs.”
The White House said it would postpone for 90 days a planned January 1
increase in US tariffs on Chinese goods, while China pledged to take in more
US imports.
Trump launched the bitter row earlier this year by implementing tariffs on
billion of dollars in goods from China, which he accuses of market barriers
and predatory trade practices.
Beijing responded with reciprocal measures.
BSS/AFP/HR/0940