Trade Tensions: Markets React to US-China Tariff Maneuvers

Shares in China and Hong Kong rose as investors discounted the recent U.S. tariff hike and focused on trade talks and state market support. Despite escalated tariffs, there remains optimism for negotiations. Analysts warn of escalating tensions, economic impacts, and market volatility, prompting institutional caution.

China and Hong Kong stocks saw an uptick on Thursday, buoyed by investor optimism around trade talks despite the heightened U.S. tariffs on Chinese imports. Market indices showed significant gains, attributed to hopes of dialogue between the two economic giants and supportive measures from state entities.

The CSI300 Index climbed 1.3%, and the Shanghai Composite increased by 1.2%. Meanwhile, the Hang Seng Index surged 2.1%, riding the coattails of a 6% jump in Chinese internet firms on U.S. markets. Analysts suggest that U.S. President Donald Trump's tactic of temporary tariff reductions could pave the way for potential negotiations.

Market experts warn of an escalating economic conflict with the United States following China's retaliatory duties on American goods. The uncertainty weighs heavily on investors, especially with China's GDP forecasts being adjusted downward. Analysts remain skeptical of an immediate resolution but forecast continued market volatility.

(With inputs from agencies.)