SHANGHAI: China stocks climbed to an eight-month high on Tuesday, while Hong Kong shares extended gains to a multi-year peak, driven by construction and power firms after work began on a major dam project in Tibet, billed as the world’s largest.
China’s blue-chip CSI300 Index climbed 0.4% by the lunch break, while the Shanghai Composite Index gained 0.3%. Hong Kong benchmark Hang Seng added 0.3%.
The Hang Seng Index rose to 25,120, the highest since November 2021, while the CSI 300 Index touched its strongest point since November 2024.
Some construction and power stocks extended rallies after China announced over the weekend the start of construction on a $170 billion hydropower dam in Tibet.
Shanghai-listed Anhui Conch Cement jumped more than 6%, while Power Construction Co. of China hit the daily maximum of 10%.
“Investors usually don’t care much about the real economy in such a bull market, especially with the rise of their confidence in Beijing’s capability in handling any economic cracks,” said Ting Lu, chief China economist at Nomura.
Easing U.S.-China tensions, Beijing’s push for long-term funds to invest in stocks and renewed confidence in the country’s manufacturing sector lifted sentiment, Lu noted.
“However, if stock markets lose steam, investors might shift more attention to the real economy, which will likely face some challenges in the second half of this year,” Lu said.
Meanwhile, the CSI Banks Index lost 1.1%, while healthcare shares rose 1%.
U.S. Treasury Secretary Scott Bessent said on Monday that Washington and Beijing would hold talks “in the very near future,” with discussions potentially covering China’s purchases of Iranian and Russian oil.
American Dollar Exchange Rate