Hong Kong Market recovers on US-China trade deal news

The Hong Kong stock market closed higher after recouping losses late afternoon on Thursday, 07 November 2019, on reports that China and the US have agreed on a plan to roll back additional tariffs in phases, a potentially key development as the world's two largest economies search for a way to end their trade war. At closing bell, the benchmark Hang Seng Index advanced 0.57%, or 158.59 points, to 27,847.23. The Hang Seng China Enterprises Index rose 0.69%, or 75.03 points, to 10,935.89.

Market recovered after news reports that China and US have agreed to proportionally roll back tariffs on each other's goods in phases. China and the United States have agreed to cancel in phases the tariffs imposed during their months-long trade war, the Chinese commerce ministry said on Thursday, without specifying a timetable. An interim U.S.-China trade deal is widely expected to include a U.S. pledge to scrap tariffs scheduled for Dec. 15 on about $156 billion worth of Chinese imports, including cell phones, laptop computers and toys. Tariff cancellation was an important condition for any agreement, ministry spokesman Gao Feng said, adding that both must simultaneously cancel some tariffs on each other's goods to reach a "phase one" trade deal. "The trade war started with tariffs, and should end with the cancellation of tariffs," Gao told a regular news briefing. The proportion of tariffs cancelled for both sides to reach a "phase one" deal must be the same, but the number to be cancelled can be negotiated, he added, without elaborating.

Blue chips were mixed. HSBC (00005) edged down 0.3% to HK$60.2. HKEX (00388) rose 0.7% to HK$253. Tencent (00700) nudged down 0.1% to HK$333.6. China Mobile (00941) inched up 0.2% to HK$64.25. AIA (01299) added 0.7% to HK$83.35.

Most casino operators narrowed their early losses. Wynn Macau (01128) declined by 0.9% to HK$17.54 after it reported an earnings decline of 54% for 3Q. Galaxy Entertainment (00027) was flat at HK$55.3 as it reported earnings growth of 6% for 3Q. Melco International (00200) fell 0.2% to HK$20.55. MGM China (02282) slid 2.5% to HK$12.7. SJM Holdings (00880) sank 0.8% to HK$8.62. But Sands China (01928) added 1.1% to HK$40.65.

Hong Kong-listed pharmaceutical company CK Life Sciences (775 HK) rose 23.33 per cent to HK$1.11, on top of Wednesday's gain of more than 150 per cent on its report of improved outcomes in clinical trials of a melanoma cancer vaccine by its wholly-owned US subsidiary Polynoma.

DaChan Food Asia (3999 HK), a chicken processor, shot up 47.3 per cent to 67 HK cents, after announcing its profit attributable to shareholders jumped 241.6 per cent in the first nine months compared to the same period in 2018.

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