- Liquor giant Kweichow Moutai jumps 3.6 per cent
- AAC Technologies soars 9 per cent on expectations of high Apple iPhone sales
Hong Kong and China stocks extended gains Friday as investors bet that the US and China will agree on a partial deal in their 19-month trade war.
The Hang Seng Index rose 1.1 per cent higher to 26,498.37, with gains by property developers as well as benchmark heavyweight Tencent, which climbed 1.7 per cent to HK$335.
Meanwhile, the Shanghai Composite Index rose 0.4 per cent to 2912.01, climbing for a second straight day.
Kweichow Moutai, the world's most valuable liquor maker and one of the most heavily traded stocks on the Stock Connect, jumped 3.6 per cent to 1,170 yuan. That was its biggest percentage gain since September 18, when it shot up 5 per cent.
The Shenzhen Composite Index rose 0.8 per cent to 9,878.62, which was its fifth straight session of gains.
China to exempt US soybeans and pork from tariffs
The interim trade deal drove sentiment.
Despite Beijing's anger about legislation in the US supporting Hong Kong protesters and Uygur Muslims, investors are betting it wants to strike a deal with the US over trade tariffs, which have added to its challenge of dealing with an economic slowdown. New US tariffs on Chinese goods are set to go into effect on December 15.
In what was seen as a fresh sign China wants a deal, it announced on Friday afternoon that some purchases of US soybeans and pork by domestic companies would be exempt from tariffs, although few details were provided. That followed a step by China last month to allow US poultry imports, which have been banned since 2015 due to an outbreak of bird flu.
From oil rigs to Wall St, HKEX chief executive Charles Li has seen it all " and is using his experience to diversify Hong Kong's bourse
But Brock Silvers, managing director of Adamas Asset Management, said investors may be too optimistic.
"We're definitely seeing some trade optimism in the market, and it seems unwarranted or at least significantly premature," said Silvers.
"(US President Donald) Trump has commented that a deal may be in the works for mid-December, but this is a common tactic with him. No details have been released, and other reports claim that China needs more time to recover from recent US bills (supporting Hong Kong protesters and Uygur Muslims), while others report the two sides can't even agree on the size of China's future soy purchases.
"I see no reason to think there's an imminent deal, nor do we know what such a deal might include," Silvers added.
Leading the Hang Seng Index in terms of percentage change were Apple supplier AAC Tech, which shot up 9 per cent on expectations of high iPhone sales, and Sunny Optical, which jumped 6 per cent.
Property developers were among the day's big gainers. Sun Hung Kai Properties rose 1.7 per cent, Henderson Land climbed 1.2 per cent, and New World Development advanced 1.6 per cent to HK$10.20.
In addition, tech stocks rallied.
Alibaba jumped 2.8 per cent, posting its second straight session of gains. Tencent advanced 1.7 per cent. Xiaomi rose 2.8 per cent. And Meituan Dianping climbed 1.6 per cent.
In China, wireless earphone stocks and e-cigarettes stocks were the top performing sectors.
Wireless earphone stocks rose 3.8 per cent, according to a gauge tracking the sector.
Apple AirPods craze spreads to China, becoming music to the ears of wireless-headset stock investors
Edifier Technology shot up 10 per cent, after gaining 10 per cent yesterday, and Shenzhen Fenda Technology also rose 10 per cent, which is the upside limit in the mainland. Luxshare Precision " a major Apple AirPod supplier " rose 3.5 per cent.
E-cigarette stocks advanced 3.4 per cent.
Shenzhen Jinjia rose 8.3 per cent, Kunshan Kersen Science & Tech shot up 10 per cent, and EVE Energy climbed 3.1 per cent.
Chinese authorities banned online e-cigarettes sales a month ago to try to protect adolescents from vaping. That is creating fierce battling among e-cigarettes companies in offline sales channels, such as shopping malls and convenience stores.
Stocks of tire pressure monitoring system makers continued on their roll.
Gainers included Ningbo Tianlong Electronics, which jumped 6.8 per cent to 12.31 yuan, and EVE Energy, which rose 3.1 per cent. to 49.58 yuan.
In October, China's Ministry of Industry and Information Technology announced that all new cars will have to have electronic monitoring systems as of January 1.
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