Chinese markets struck a bullish tone this week amid a continuing rise in applications for new share sales, steps taken by China and the US to ease trade tensions, a ceasefire in the Israel-Iran war and the Chinese government’s commitment to open up business opportunities wider for foreign investors.
Chinese officials confirmed an agreement with the US that will expedite rare earth exports from China and lift some US bans on technology exports to China – a step forward in trade negotiations.
At this week’s Summer Davos held in Tianjin, Chinese Premier Li Qiang again stressed China’s firm commitment to opening up its business markets and invited foreign investors to share the country’s opportunities. Some participants spoke highly of China’s growth, calling it a rare bright spot in a world filled with regional tensions.
“A lot of uncertainties are becoming less uncertain,” said Zhang Yu, chief macroeconomics analyst at Hua Chuang Securities Co. “Trade conflicts the past three months have made global trade extremely difficult to analyze and predict. Settlements allow us to make better forecasts and exporters to work out remedies.”
The Shanghai Composite Index rose 1.9 percent in the past week, buoyed notably by performances in finance and smart-cars sectors.
The Shanghai Composite Index rose 1.9 percent in the past week, buoyed notably by performances in finance and smart-cars sectors. China smartphone maker Honor was the latest company to file documents for an initial public offering on the mainland. The Shenzhen Component Index jumped 3.7 percent.
In Hong Kong, the Hang Sang Index surged 4 percent as the city continued to be a magnet for initial public offerings. Shares in Chinese electric-car maker Xiaomi surged 3.6 percent to a record after the company announced that its new luxury YU7 model will undercut Tesla on price in the domestic market, and reported a flood of pre-sale orders.
Elsewhere in Asia, Japan’s Nikkei surged 4.9 percent. Its biggest carmaker Toyota reported an increase in global vehicle sales for a third month. South Korea’s Kopsi index rose 2.1 percent in the week.
On Friday, the S&P 500 and Nasdaq in New York both rose 0.5 percent to record highs, wrapping up the week with increases of 3.4 percent and 4.3 percent, respectively. European stocks gained across the board, with Germany’s DAX adding 2.9 percent in the week.
Oil prices posted their biggest weekly drop in three years on the ceasefire in the Middle East, with benchmark Brent crude settling at US$65.52 a barrel. Gold lost some of its safe-haven attraction amid easing geopolitical tensions, dropping 1.9 percent on Friday to US$3,286.10 an ounce.