Hong Kong stocks boosted by fresh trade deal optimism

The Hong Kong stock market closed higher on Tuesday, supported by sentiments in global markets and as Beijing and Washington appeared to progress towards a trade deal. At the close of trade, the Hang Seng index was up 1.5 per cent at 28,920.87 points, while the Hang Seng China Enterprises index rose 1.7 per cent. The sub-index of the Hang Seng tracking energy shares gained 1.3 per cent, while the IT sector rose 0.5 per cent, the financial sector ended 1.5 per cent higher and property stocks climbed 1.6 per cent.

Chinese Vice Premier Liu He held a telephone call with U.S. Treasury Secretary Steven Mnuchin and U.S. Trade Representative Robert Lighthizer on key issues in their trade talks on Tuesday, Chinese state news agency Xinhua reported in early trade. The phone call came one day after White House spokeswoman Sarah Sanders said China and the United States have not confirmed a date for a summit between presidents Donald Trump and Xi Jinping, at which the leaders are expected to finalise a pact that would end a months-long trade war.

Sentiments in global markets were buoyant, as the pound rallied after the European Commission agreed to changes in a Brexit deal before a vote in the British parliament on a divorce agreement that has unnerved financial markets over recent months.

Around the region, MSCI's Asia ex-Japan stock index was firmer by 1 per cent, while Japan's Nikkei index closed up 1.8 per cent. In China, sources told Reuters that the People's Bank of China was studying the potential impact of interest rate overhaul to loan pricing, just as speculation grows over whether the central bank will cut interest rates soon to support the slowing economy.

The top gainer on the Hang Seng was WH Group Ltd, which gained 6.5 per cent, while the biggest loser was China Mengniu Dairy Co Ltd, which fell 1 per cent. The top gainers among H-shares were Dongfeng Motor Group Co Ltd, up 5.1 per cent, Guangzhou Automobile Group Co Ltd, up by 3.7 per cent, and China Resources Land Ltd, gaining 3.8 per cent. About 1.92 billion Hang Seng index shares were traded. The volume traded in the previous trading session was 1.57 billion. At the close, China's A-shares were trading at a premium of 22.04 per cent over the Hong Kong-listed H-shares.