Chinese Stocks Rise Amid Stimulus Hopes and Trade Tension Concerns

China and Hong Kong stocks experienced growth on Thursday, driven by investor optimism over potential economic stimulus, despite challenges posed by a potential second Trump administration. Key indices rose while investors anticipated outcomes from China's National People's Congress meeting, which could influence market trends through new fiscal and monetary policies.

China and Hong Kong stock markets witnessed gains on Thursday, fueled by investor optimism regarding prospective stimulus measures. This sentiment appeared to outweigh worries about escalating trade tensions under a possible second term for Donald Trump.

The blue-chip CSI300 Index climbed by 0.7% by midday, with the Shanghai Composite Index increasing by 0.9%. In contrast, Hong Kong's Hang Seng Index, a reflection of foreign investor perspective, advanced by 1.2%, having dipped by 2.3% the day before. Investor attention now turns to the National People's Congress Standing Committee meeting set to conclude on Friday, where any unexpected stimulus announcements are likely to boost enthusiasm for Chinese stocks.

David Chao, Asia Pacific global market strategist at Invesco, suggested that increased fiscal and monetary stimulus from Beijing might offset some trade-related challenges. Consumer stocks and property shares in China led market gains, rising 3.6% and 1.9%, respectively. Analysts warn, however, that Trump's potential imposition of 60% tariffs on U.S. imports of Chinese goods could significantly impact China's economic growth trajectory.

(With inputs from agencies.)