Chinese Stocks Advance as Trade Resumes After Holidays
China’s Markets Set to Reopen With Trade, Hong Kong in Focus
(Bloomberg) -- Chinese stocks rose as they traded for the first time in a week, with investors focusing on the upcoming trade talks with the U.S.
The CSI 300 Index closed up 0.6%. Hangzhou Hikvision Digital Technology Co. and Zhejiang Dahua Technology Co. halted trading after they were placed on a U.S. blacklist along with six other Chinese technology firms. Hong Kong Exchanges & Clearing Ltd. gained 2.3% after dropping its takeover bid for London Stock Exchange Group Plc. The yuan was up 0.3%.
Ahead of the trade talks, senior Chinese officials have indicated the range of topics they’re willing to discuss has narrowed considerably, people familiar with the matter said. The U.S. announcement of the blacklisted firms came as negotiators from both sides began preparations for the talks due to begin Thursday in Washington.
The U.S. accused the blacklisted firms of being implicated in human rights violations against Muslim minorities in China’s far-western province of Xinjiang. Entities on the list are prohibited from doing business with American companies without being granted a U.S. government license, though some have maintained relationships with banned companies through international subsidiaries.
In a further twist ahead of the trade talks, China’s state broadcaster CCTV said that it would halt broadcasts of the National Basketball Association’s games as backlash intensified against the U.S. league over a tweet that expressed support for Hong Kong’s pro-democracy protesters.
Hong Kong’s financial markets were also closed Monday for a holiday, after a weekend in which a ban on wearing masks spurred violent protests across the city, with banks and shops vandalized, and much of the transport network shut down.
The outlook remains clouded. The Hang Seng Index tumbled 8.6% last quarter, the biggest loss among major global gauges tracked by Bloomberg. Developers and mall operators dropped most as the escalating protests weighed on the economy and deterred travelers to the city. On Tuesday Cathay Pacific Airways Ltd. fell 3.7%, at one point hitting its lowest since 2009. New World Development Co. fell 2.5% to lead declines on the benchmark index, which rose 0.3%.
A teenage demonstrator was shot and wounded during a struggle with police Friday. Local media including the South China Morning Post also reported a man was dragged from his taxi and seriously beaten after apparently plowing into a crowd of protesters.
The yuan has stabilized after falling heavily in August, when it weakened past the key 7-per-dollar level for the first time since the financial crisis. The currency dropped almost 4% in the third quarter, the worst performance in Asia.
“Our base scenario is that China and the U.S. will reach a partial deal,” which will support the yuan in the coming weeks, Ken Cheung, chief Asian foreign-exchange strategist at Mizuho Bank Ltd., said last week. “But depreciation pressures will resurface if both sides fail to make further progress.”
To contact the reporters on this story: Elena Popina in Hong Kong at epopina@bloomberg.net;Tian Chen in Hong Kong at tchen259@bloomberg.net
To contact the editors responsible for this story: David Watkins at dwatkins19@bloomberg.net, Richard Frost
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