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As investor focus shifts from Taiwan to China and Hong Kong stocks

Chinese and Hong Kong stocks said on Thursday that investor interest shifted from tensions over Taiwan to a number of newly launched infrastructure projects in hopes of helping Beijing stabilize its COVID-19-hit economy. China’s main CSI300 index rose 0.3% during the lunch break, while the Shanghai Composite index rose 0.2%. Hong Kong’s benchmark Hang Seng rose 1.5%, led by tech stocks. Analysts say markets are relieved that Speaker of the House Nancy Pelosi’s visit to Taiwan did not spark a direct military conflict, but tensions between China and the United States over Taiwan, which China claims to be his, have persisted.

Chinese infrastructure stocks rose 0.7%. Shares of Chinese banks also rose ahead of the release of credit data in July. In Hong Kong, the Hang Seng Tech index rose 2.2%. Shares of Hong Kong-listed Alibaba rose 4% as the Chinese tech giant is due to announce results on Thursday. Trip.com, Baidu and SMIC all rose more than 3% in Hong Kong.

Son Nuno Fernandes, partner and portfolio manager at GW&K, said: “We believe more sober thoughts prevail.” Investors’ attention is now turning to signs that infrastructure spending is accelerating as Beijing tries to revive its economy. Construction of 3,876 major projects began in July, with a total investment of 2.4 trillion yuan ($355.33 billion), according to Securities Times. In the second half of the year, China’s national grid plans to invest more than 150 billion yuan in ultra-high voltage (UHV) transmission lines.

Summary of news:

  • As investor focus shifts from Taiwan to China and Hong Kong stocks
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