Hong Kong
stocks traded near a three-week high as investors weighed the prospect of stimulus measures from Beijing against the backdrop of heightened trade tensions.
The Hang Seng Index slipped less than 0.1 per cent to 19,742.46 at the close in rangebound trading. The Hang Seng Tech Index slid 0.3 per cent. The CSI 300 Index dropped 0.5 per cent and the Shanghai Composite Index fell 0.4 per cent.
Online travel agency Trip.com Group rallied on optimism about the business outlook after China’s recent expansion of the list of visa-free countries. Semiconductor Manufacturing International Corp (SMIC) rose on expectations about rising demand for domestic chips after China’s state-backed industry associations
called for the shunning of US chips. Property developer New World Development (NWD) slid on concerns about corporate governance following the
replacement of its CEO.
China plans to
restrict exports to the US of minerals that are crucial to technology and military use, the Ministry of Commerce said on Tuesday. The list includes gallium, germanium and graphite, which are vital for both military and civilian applications.
The ban came just a day after the Biden administration announced restrictions on exports of cutting-edge
chipmaking equipment and materials that are essential for the development of artificial-intelligence technology. The US condemned Beijing’s move and said it would take “necessary steps” to prevent further “coercive” measures.
“Expect increased market volatility in [the first half of 2025] as the US embarks on another round of trade rebalancing with China via higher tariffs,” brokerage firm UOB Kay Hian said in a strategy report on Wednesday. “We expect China to roll out growth-supportive policies on top of the de-risking measures that have been announced.”
The brokerage set a target of 68 for the MSCI China Index, implying a gain of about 6 per cent from the gauge’s close on Tuesday. The index may fall to 51 if a full-blown trade war breaks out, it said.
