China stocks post biggest gain in 6 weeks as trade jitters ease
China stocks experienced their largest gain in six weeks, with the Shanghai Composite index rising 1.4% to 3,916.33, driven by easing Sino-U.S. trade tensions and positive corporate earnings. The blue-chip CSI300 index increased by 1.5%, while Hong Kong's Hang Seng Index rose 0.7%. Optimism about a potential trade deal between the U.S. and China contributed to investor confidence, with expectations of a meeting between Presidents Trump and Xi at APEC. The AI sector surged 4.6%, and semiconductor shares rose 3%, reflecting strong market sentiment.
(Updates to market close, adds quotes)
By Jiaxing Li
HONG KONG, Oct 21 (Reuters) - China stocks recorded their biggest gain in six weeks on Tuesday, as fresh signs of easing Sino-U.S. trade tensions and upbeat corporate earnings boosted risk appetite.
At market close, the Shanghai Composite index (.SSEC) climbed 1.4% to 3,916.33, the best single-day gain since September 11. The blue-chip CSI300 index (.CSI300) was up 1.5%.
Hong Kong’s Hang Seng Index (.HSI) was up 0.7% at 26,027.55, and the tech index (.HSTECH) gained 1.3%.
U.S. President Donald Trump on Monday expressed optimism about a potential fair trade deal with Chinese President Xi Jinping, following his comments that the hefty tariff on China is “not sustainable”.
Most investors now “do not expect a meaningful derail of the U.S.-China trade talks,” Bank of America said in a note, citing recent marketing feedback.
Instead, they increasingly see both parties muddling through and eventually reaching an agreement, and an in-person Trump-Xi meeting during APEC by month-end remains the base case, the bank added.
KGI Asia’s CIO Cusson Leung said the firm remains overweight on China and Hong Kong shares, expecting the tech-led rally to broaden out, and is looking to buy laggards like financials and consumer discretionary on dips to increase its exposure.
The current China re-rating could have more room to run as investors grow more resilient to trade noise and confidence in Chinese assets improves, he added.
Leading gains on Tuesday, the AI sector (.CSI930713) jumped 4.6% and semiconductor-related shares (.CSI931865) jumped 3%. Chip designer Wingtech (600745.SS) rallied by the 10% daily limit as investors focused on negotiations over its subsidiary Nexperia’s seizure this week.
Apple’s (AAPL.O) Chinese suppliers also strengthened, with the consumer electronics index (.CSI931494) up 4.5% after the phone maker’s share price surged to all-time high on strong iPhone 17 demand.
HK-listed shares of CATL (3750.HK) rallied as much as 6% after reporting a 41.2% surge in quarterly net profit.
