HK-listed Chinese stocks hit 3-month high despite China, US tariffs

HK-listed Chinese stocks hit 3-month high despite China, US tariffs


CHINESE stocks listed in Hong Kong surged on Tuesday (Feb 4) as investors loaded up on artificial intelligence and electric vehicle shares while shrugging off news of tit-for-tat Sino-US tariffs on each other’s goods.

China’s finance ministry announced a package of tariffs on a range of US products in an immediate response to President Donald Trump’s 10 per cent tariff on Chinese imports that went into effect at 0501 GMT.

Investors had been hoping Trump would retract the proposal to raise tariffs on China at the last minute, just as he did with Canada and Mexico on Monday.

However, as the deadline passed and US tariffs came into force, Beijing announced its own levies of 15 per cent for US coal and LNG and 10 per cent for crude oil, farm equipment and some autos. The new tariffs on US exports will start on Feb 10, China’s finance ministry said.

“China is trying to get some bargaining power before getting close to the negotiating table. It doesn’t mean that they will not go for negotiation talks,” said Steven Leung, who handles institutional trading at stockbroker UOB-Kay Hian in Hong Kong.

Trump’s press secretary said the president will speak with Chinese President Xi Jinping in the next couple of days

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The Hang Seng China Enterprises Index closed up 3.5 per cent at a fresh three-month high. The Hang Seng Tech Index surged 5.1 per cent, and Hong Kong’s benchmark Hang Seng index added 2.8 per cent.

The Hang Seng Index has advanced 3.6 per cent so far this year, outperforming major global markets including Japan and the US S&P 500 index. Wong Kok Hoong, head of equity sales trading at Maybank, said investors had so far viewed tariffs as a negotiation strategy between the two superpowers.

Trump’s announcement of the 10 per cent tariff had also come as a relief, for his threats soon after he won the election last year were to impose 60 per cent tariffs on China.

“It’s the glass-half-full way of looking at Hong Kong and China… perhaps only a 10 per cent tariff and not the dreaded 60 per cent from the get-go,” he said. “In a way markets may be slowly interpreting tariffs as a negotiation tactic, and one can strike a deal with this POTUS.”

Beijing’s initial proposal to Trump’s tariffs will centre on restoring the “Phase 1” trade deal signed in 2020 during his first term, the Wall Street Journal reported on Monday, citing sources.

Leading gains on Tuesday, AI-related stocks rallied as investors continued to pile up wagers on home-grown firms after startup DeepSeek released a large language model at a lower cost.

China’s top chipmaker SMIC surged 8.5 per cent to a record high, and peer Hua Hong Semiconductor advanced 12.7 per cent.

The EV sector also lifted the market, with carmaker XPeng jumping 11.8 per cent after the company said it delivered a nearly three-fold increase in smart EVs in January year on year.

Financial markets in mainland China will reopen on Wednesday after the long Chinese New Year holiday. China’s benchmark blue-chip index fell 3 per cent in January before the holiday, surrendering nearly half of September’s 40 per cent rally.

The markets may look through the political noise to focus on China’s responses to US tariffs and the upcoming National People’s Congress (NPC) meeting in the next few weeks, analysts at Citi said in a note. REUTERS



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