Stock News: China Stocks Rally Upon Tariff Increase
May 10, 2019 | Friday
TChina stocks rose on Friday right after the United States carries out its tariff threats on Chinese goods during midnight. Unexpectedly, the Chinese mainland stocks recover upon early wobble.
The Shanghai composite increased by 3.1 percent to a 2,939.21 while the Shenzhen component fleets a 4.03 percent to a 9,235.39. The Shenzhen composite also bounced a 3.833 percent closing at 1,568.62.
The increase in tariffs implemented by the United States is from 10 percent to 25 percent on $200 billion worth of imported Chinese goods effective at 12:01 a.a. ET Friday. But still, according to the White House, the trade negotiations with China will continue. Meanwhile, Reuters reports that Beijing does "deeply regrets" the tariff hike and now plans to countermeasure the scenario.
According to Ken Wong, Asia equity portfolio strategist at Eastspring Investments, as markets "have corrected" on the past few days, investors could expect a few "short covering."
Meanwhile, according to Nick Marro, analysts at the Economist Intelligence Unit, the continuation of the trade talks at Washington are to bring "positive" views for the investors. During an interview, he explained that the tariff escalation is to greatly impact the "goodwill and the positive momentum" performance during the first quarter. Marro added, the outcome can be very hard for both.
Marro also pointed out the potential for U.S.-China trade deal "has gone down," and talks may break down further.
Elsewhere, Hong Kong's Hang Seng index increased by 1 percent on its final hour of trading. On the contrary, within Asia, Japan's Nikkei 225 dropped by 0.27 percent closing at 21,344.92. Topix also fell fractionally finishing the trading day at 1,549.42.
On the contrary, Kospi of South Korea went 0.29 percent higher closing at 2,108.04. Australia's ASX 200 also went 0.25 percent higher to a 6,310.90.
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