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Hong Kong Market gains 2.3% on Sino-U.S. trade hopes

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Capital Market
Last Updated : Jun 19 2019 | 1:04 PM IST
Headline indices of the Hong Kong share market advanced on Wednesday, 19 June 2019, following Wall Street's rally overnight on signs that US-China trade relations could be improving after US President Donald Trump told reporters that talks between the United States and China would start on Wednesday. Meanwhile, buying sentiments were underpinned by the possibility that the European Central Bank could inject the eurozone with an economic stimulus, along with expectations for an eventual interest rate cut by the US Federal Reserve. Around late afternoon, the Hang Seng Index surged 2.3%, or 638 points, to 28,136.78. The Hang Seng China Enterprises Index was up 2.3%, or 238.44 points, to 10,746.09.

The US share market climbed on Tuesday after U.S. President Donald Trump said in a tweet he had a very good telephone conversation with Chinese President Xi Jinping, with a meeting between the two set to happen next week. The Dow Jones Industrial Average soared 353.01 points to 26,465.54 and the S&P 500 advanced 1% to 2,917.75. The Nasdaq Composite rose 1.4% to 7,953.88.

U.S. President Donald Trump tweeted that he had "very good" talks with China's President Xi Jinping and that the two leaders would have an "extended meeting" at the G20 summit in Japan later this month. The summit will start on June 28. A short time later, Xi echoed Trump's upbeat tone, saying that China and the United States should push for "positive outcomes" at the summit of world leaders, in order "to inject confidence and vitality into the global market."

Trade tensions between the two economic powerhouses had worsened in recent weeks with both raising tariffs on billions of dollars worth of their goods. Trump had also previously suggested that additional levies could be imposed on more Chinese imports.

Traders await the outcome of the US Federal Reserve's meeting later on Wednesday, with the central bank widely expected to join its European counterpart in striking a dovish tone. Traders also cautious after the news report said that the OPEC and group of oil producers is close to agreeing their next meeting to discuss output policy.

Chinese port operator Rizhao Port Jurong (6117 HK) continued soaring on its first day of trading, rising at one point to HK$5.50, which is 267% higher than its offering price of HK$1.50. The stunning performance could be a result of optimism that trade tensions are easing, as it is China's largest port for grain imports last year. China slapped 25% tariffs on US soybeans last year, which led to a drastic plunge in soybean imports.

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First Published: Jun 19 2019 | 12:40 PM IST

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