HSI Starts The Week With Bang, Asian Markets Up

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2020-06-01 HKT 17:56

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  • Hong Kong market was perked up as the steps announced by the US president were not as bad as some feared. Image: Shutterstock

    Hong Kong market was perked up as the steps announced by the US president were not as bad as some feared. Image: Shutterstock

Hong Kong stocks started the week with a bang on Monday, rallying more than 3 percent on relief that Donald Trump held off unveiling severe measures against China over its security law proposal for the financial hub.

The Hang Seng Index jumped 3.4 percent, to 23,732.

On the mainland, the Shanghai Composite Index rose 2.2 percent, to 2,915 while the Shenzhen Composite Index rallied 3.2 percent, to 1,842.

Tokyo ended 0.8 percent higher, while Singapore was up more than 2 percent, with Sydney, Seoul, Taipei, Manila and Bangkok more than 1 percent higher. Mumbai gained 3.5 percent.

The Hang Seng Index had spiralled last month after Beijing proposed the new law, which some fear could lead to the end of the city as a key financial hub. But actions announced by Trump were not as severe as many feared.

The news conference "was long on criticism of China but short on action", said AxiCorp's Stephen Innes.

"Most economists think the direct impact of revoking Hong Kong's special customs status and more export controls will likely be limited, as Hong Kong will remain a free port, and its exports to the US account for less than 0.1 percent of gross domestic product."

But David Madden at CMC Markets warned further upheaval could still be on the cards.

"Just because Donald Trump didn't go head to head with the Chinese government over trade, doesn't mean he won't at a later date," he said in a note. "After all, he has an election to contest at the back end of the year, so he might turn on China then to try and score political points."

But six days of violent demonstrations by thousands of people against police brutality in the United States have raised market worries as well as fear that it could led to a spike in coronavirus infections there. (AFP)