Bank Rally Drives China and Hong Kong Stocks Higher Despite Trade Curbs

China and Hong Kong markets climbed on Tuesday, driven by a bank rally and tech shares defying U.S. trade restrictions on Chinese chips. The Shanghai Composite and Hong Kong's Hang Seng Index respectively gained 0.68% and 1.08%. Investors sought high dividend yields amid low bond yields.

China and Hong Kong stock markets saw an upward trend Tuesday, mainly due to strong performances in the banking sector. Additionally, technology stocks showed resilience despite new trade restrictions imposed by the U.S. on Chinese chips.

In Hong Kong, the Hang Seng Index increased by 1.08% to reach 20,098.29, marking its highest in nearly two weeks. This has resulted in an 18% overall increase this year, placing it among the top performers in global markets. Financial markets in the region will close Wednesday and Thursday for a public holiday.

On the mainland, banks continued their Monday rally, bolstered by investor interest in high dividend yields as bond yields decline. China's major banks, including the Industrial and Commercial Bank of China, reported gains, contributing to a promising market close for 2024.

(With inputs from agencies.)