Hong Kong Stocks gain on China-U.S. trade hopes, Tencent upbeat earnings

Headline shares of the Hong Kong market closed higher on Thursday, 15 November 2018,as risk sentiments encouraged after China delivered a written response to US trade demands, lifting hopes for a resumption of negotiations, with energy firms enjoying some much-needed buying after recent battering, while market heavyweight Tencent was lifted by a forecast-beating earnings report.At closing bell, the Hang Seng Index advanced 448.91 points or 1.75% to 26,103.34. The Hang Seng China Enterprises Index increased by 150.33 points or 1.44% to 10,555.49.

China has delivered a written response to US demands for wide-ranging trade reforms in a move that could trigger negotiations to bring an end to a withering trade war between the world's top economies. Beijing's proposal comes after US Treasury Secretary Steven Mnuchin and Chinese Vice Premier Liu He spoke by phone on Friday to jump start trade discussions ahead of an expected meeting between the two countries' leaders. US President Donald Trump has said he will have a "good meeting" with his Chinese counterpart, Xi Jinping, on the sidelines of the G20 leaders summit in Buenos Aires later this month. The United States was demanding that the Chinese come up with a clear offer before negotiations on a trade deal could start, while Beijing had been reluctant, seeking talks ahead of making any firm proposals. Both sides have been working toward a path to end the escalating trade war, which has left investors jittery over its impact on consumers and companies in the world's top two economies. The Trump administration has already slapped tariffs on $250 billion in Chinese products since July. The tariffs on $200 billion of those goods are set to increase to 25% from 10% on January 1, which would further escalate the conflict. China retaliated with tariffs on $110 billion of US products and is likely to respond with more if the United States goes ahead with the increase at the start of January.

Hong Kong market heavyweights were higher. Tencent (00700) jumped 5.8% to HK$288 after the online game giant reported strong quarterly earnings, which brought in mixed comments from research houses. HSBC (00005) added 1.1% to HK$66. HKEX (00388) gained 1.5% to HK$229. China Mobile (00941) put on 1.8% to HK$76.45. AIA (01299) rose 1.1% to HK$64.2.

Energy stocks gained after crude oil prices rebounded 1% overnight ahead of OPEC's meetings scheduled next month about output reduction. CNOOC (00993) gained 2.1% to HK$12.96. PetroChina (00857) nudged up 0.5% to HK$5.7. Sinopec (00386) was up 1.1% to HK$6.58.

Shares of handset components suppliers were down after reports stated iPhone sales will reduce 5% next year. AAC Technologies (02018) was flat at HK$52.9. Sunny Optical (02382) shot up 2.6% to HK$75.85.

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