Hong Kong shares rally over China's call to attend trade talks in US

Hong Kong shares ended higher on Tuesday, after heavy losses in the previous session, as China confirmed sending Vice Premier Liu He to continue trade talks with the United States this week. ** At the close of trade, the Hang Seng index was up 0.5 per cent at 29,363.02. The Hang Seng China Enterprises index rose by 0.2 per cent. ** The sub-index of the Hang Seng tracking energy shares rose 1.3 per cent, while the IT sector rose 1.1 per cent, the financial sector ended 0.3 per cent higher and the property sector rose 0.6 per cent.

Shares climbed in the afternoon session as the Chinese commerce ministry confirmed that Vice Premier Liu He will go ahead with his visit to the United States on May 9 and May 10 for bilateral trade talks. ** On Monday, a Chinese Foreign Ministry spokesman had said that China's trade negotiation team is "preparing to go to the United States for the discussions" but did not specify if Liu would lead the delegation.

The local market suffered a sell-off of Monday, which came on the heels of U.S. President Donald Trump threatening to raise tariffs on $200 billion worth of Chinese goods to 25 per cent from 10 per cent by Friday, and to target the remaining Chinese imports with tariffs "soon". **Senior U.S. officials said that China has backtracked on commitments it made during trade talks.

Most analysts estimate direct U.S. losses so far of 0.1-0.2 per cent of gross domestic product, while for China the damage could be 0.3-0.6 per cent of GDP. ** The French Finance Minister urged both the United States and China on Tuesday to avoid escalating trade tensions in their current negotiations to keep global growth on track. ** China's main Shanghai Composite index added 0.7 per cent while the blue-chip CSI300 index was 1 per cent higher. ** Around the region, MSCI's Asia ex-Japan stock index was firmer by 0.4 per cent, while Japan's Nikkei index closed down 1.5 per cent.

The top gainer on the Hang Seng was CNOOC, which gained 3.1 per cent, while the biggest loser was Bank of China Ltd, which fell 1.1 per cent. ** About 2.06 billion Hang Seng index shares were traded. The volume traded in the previous trading session was 3.03 billion. ** At close, China's A-shares were trading at a premium of 22.68 per cent over the Hong Kong-listed H-shares.