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China stocks rise as Beijing slashes U.S. tariffs amid virus spread

Thu 6th February, 2020 5:12am
(Adds analyst comment on tariff cut, updates prices)
    * SSEC +1.5%, CSI300 +1.6%, HSI +2.8
    * China to halve some U.S. tariffs starting on Feb. 14
    * Stocks track global rally amid rumours of coronavirus
vaccine

    HONG KONG, Feb 6 (Reuters) - China shares climbed for a
third session on Thursday as Beijing said it will soon halve
tariffs on some goods from the United States, easing concerns
about the long-term outlook for the economy that is facing a
sharp blow from a virus outbreak.
    
** At the midday break, the Shanghai Composite index  .SSEC 
jumped 1.5% in early afternoon trade, while the blue-chip CSI300
index  .CSI300  was up 1.6%.
** CSI300's financial sector sub-index  .CSI300FS  rose 1%, the
consumer staples sector  .CSI000912  gained 2.1% and the
healthcare sub-index  .CSI300HC  was up 3.8%.
** Chinese H-shares listed in Hong Kong  .HSCE  and the Hang
Seng Index  .HSI  climbed 2.8% each.
** The smaller Shenzhen index  .SZSC  was up 2.4% and the
start-up board ChiNext Composite index  .CNT  rose 2.9%.    
** Shortly after the morning session, China said it will halve
tariffs on some goods imported from the United States
starting on Feb. 14, and reiterated that it hopes it can work
with Washington to eventually scrap all tariffs in bilateral
trade.  urn:newsml:reuters.com:*:nL4N2A61K6
** "This helps shift the focus a bit," said Linus Yip, chief
strategist at First Shanghai Securities. "Long-term investors
have been allocating Chinese equities since Monday's drop. Any
good news would accelerate that, and anything that helps fight
the epidemic or the economy is good news." 
** Domestic markets were also lifted by a global rally late
Wednesday that traders attributed to vague rumours of a possible
vaccine or a drug breakthrough for the coronavirus, although
they also said such catalysts were likely to be an excuse for
short-covering.   urn:newsml:reuters.com:*:nL8N2A5287
** The World Health Organization played down such media reports
on Wednesday of "breakthrough" of drug discovery.  urn:newsml:reuters.com:*:nL8N2A5414
** Share prices this week were also aided by policymakers'
efforts to prevent heavy selling, including liquidity injections
and de facto restrictions on selling.  urn:newsml:reuters.com:*:nB9N2A200C urn:newsml:reuters.com:*:nL4N2A20FA
** "We believe market valuations currently are relatively
attractive, (we) can also expect adjustment policy (support),"
analysts at Galaxy Securities wrote in a report on Thursday,
though they added it will take time for stocks to recover.    
** Others remain sceptical. Pictet Asset Management said on
Thursday they have reduced equities "across the board" in Hong
Kong and Mainland China as these are "economies that are most
affected" by the coronavirus.
** Around the region, MSCI's Asia ex-Japan stock index
 .MIAPJ0000PUS  was firmer by 1.7%, while Japan's Nikkei index
 .N225  was up 2.6%.
** As of midday, China's A-shares were trading at a premium of
23.30% over the Hong Kong-listed H-shares.
** The Shanghai stock index is below its 50-day moving average
and below its 200-day moving average.   
    

 (Reporting by Noah Sin in Hong Kong, Editing by Sherry
Jacob-Phillips)
 ((Noah.Sin@thomsonreuters.com; +852 2841 5782; Reuters
Messaging: noah.sin.thomsonreuters.com@reuters.net; Twitter: https://twitter.com/noah_sin))
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