Boost in Chinese Stocks: Easing Trade Tensions Drive Market Rally

China and Hong Kong stock markets rose on Wednesday, driven by financial stocks, as new fund performance evaluation rules were introduced, and tech sector earnings gained focus amid easing U.S.-China trade tensions. The CSI300 Index climbed, with bank shares leading the way, and tech giants like Tencent and Alibaba saw significant gains.

China and Hong Kong stock markets closed higher on Wednesday, buoyed by gains in financial stocks. Analysts linked the upswing to recently introduced rules on fund performance evaluation, which could bolster underweight index components. Meanwhile, investors turned their attention to tech sector earnings as tensions in U.S.-China trade relations subsided.

The CSI300 Index, a major benchmark in China, saw a rise of 1.2%, while the Shanghai Composite gained 0.9%. Hong Kong's Hang Seng Index increased by 2.3%. Strong performances were seen among banks and insurance companies, with the CSI300 Financial Index increasing by 2.2%. The Chinese government announced further support for science and technology enterprises, expanding credit facilities for these firms.

Financial markets have recovered from the downturn triggered by President Trump's tariffs imposed in April. According to UBS strategist James Wang, with major uncertainties diminishing, stock fundamentals are becoming increasingly important for predicting share price movements. The tech sector, including firms like Tencent and Alibaba, showed notable gains, highlighting the market's anticipation of positive earnings results.

(With inputs from agencies.)