The Shanghai stock exchange hit a 3.5-year high on Wednesday on hopes of a China-US trade deal. The Shanghai Composite index rose 0.45% to 3,633.99 points, posting gains for the third consecutive day. This was the highest closing level recorded since December 31, 2021. Meanwhile, the CSI300 index rose 0.24%.
Defense and coal stocks were the biggest gainers, rising 2.65% and 2.21% respectively. US President Donald Trump said a trade deal with China was close and that he would meet with Chinese President Xi Jinping before the end of the year. Trump said, “We get along very well with China, we are very close to an agreement.”
Winnie Chwang, portfolio manager at Matthews Asia, stated that investors expect more clarity from the China-US trade talks. BNP Paribas East Asia strategy head Jason Lui stated that China’s reintroduction of the new value-added tax encourages fund redistribution and is consistent with the improving momentum in capital markets.
In Hong Kong, the Hang Seng index rose 0.03% to 24,910.63 points, while the Hang Seng China Enterprises index fell 0.21% to 8,932.68 points.
Markets will focus their attention on local economic data to be released this week, as well as indicators such as trade data and inflation.
According to a Reuters poll, China’s export growth is expected to slow in July. Investors are waiting to see whether Beijing can reach an agreement with the U.S. or whether Trump will reimpose additional tariffs.
