Hong Kong stocks started the week on a solid note as investors expected a US-China tariff pause would be extended and after the US and the European Union (EU) agreed on a trade deal, moves that could prevent the global economy from slipping into a recession.
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The Hang Seng Index rose 0.4 per cent to 25,490.45 at the noon break on Monday, while the Hang Seng Tech Index dropped 0.6 per cent. On the mainland, the CSI 300 Index and the Shanghai Composite Index both slipped 0.2 per cent.
AIA Group led insurers after Morgan Stanley boosted its price target on the sector. It rose 4.5 per cent to HK$73.70 after the investment bank raised its price target to HK$96, citing solid growth in its new business value. China Life Insurance rallied 3.5 per cent to HK$23.55 and Ping An Insurance Group added 3.2 per cent to HK$56.25.
CK Hutchison Holdings advanced by as much as 2.2 per cent after saying a mainland Chinese strategic investor would join a group seeking to buy its port assets. Its gains later faded and shares were recently at HK$53.15.
China and the US were expected to extend their tariff truce by another three months during a third round of talks that is under way in Sweden, the Post reported, citing sources close to the matter on both sides. Negotiations are expected to conclude on July 30.
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President Donald Trump said that the EU accepted a 15 per cent tariff rate on the bloc’s goods entering the US and agreed to significant purchases of American energy and military equipment in a framework trade deal. The US also signed a trade agreement with Japan last week, which triggered a rally in global equities amid receding fears of a trade war.