China Stocks Roared At Highest Level Since July
Chinese stocks peaked on Sept. 3 at a level that was never seen in months. The Shanghai Composite Index closed 0.2% at what experts said was its "best close" since July 31.
The rally was led by participants in the infrastructure sector, as well as shipbuilding and consumer electronics. The latter accounted for the biggest push for the rally. This positive development followed another good news on China's manufacturing sector expanding to a five-month high in August.
Experts said the peak in Chinese stocks showed how the country's tech sector is becoming self-sufficient as U.S. companies left the region amid the escalating trade war.
Among tech stocks leading the rally is Xiaomi which shares jumped 4.2% in Hong Kong. The jump happened after the world's fourth-largest smartphone manufacturer announced a share buyback plan of 12 billion Hong Kong dollars.
The rally was also driven by China's decision to file a complained against the United States at the World Trade Organization. This was after the Trump administration imposed fresh new rounds of tariffs on Sunday.
The U.S. imposed new 15% tariffs on Chinese goods. In retaliation, China also imposed new levies on U.S. crude oil. This has been the latest escalation in the ongoing trade war between the world's two largest economies.
Details of its WTO complaint were not revealed in public but officials said the US tariffs have compromised $300 billion of Chinese exports. China argued that the fresh tariffs from the US are a violation of the concessions agreed during a meeting among respective negotiators. WTO is the authority over the allowable limits one country can charge another.
China is on its toes in putting an end in the trade war which is perceived from the start as outright unfair. The country has been doing its best to recover from impacts the trade war is bringing into its different sectors.
China's persistence to meet with the US eye to eye on the matter is admirable for market experts especially to those who believe that America is at the losing end after the trade war. Kim Eng, S&Ps primary sovereign analyst for China said the trade war will only dent China's economy at the lowest level.
Some experts opined that China will also be coming out with some measures to cushion its economy in preparation for its 70th anniversary of the founding of the People's Republic of China to be held on Oct. 1.
Meanwhile, US stocks plunged sharply on Tuesday after the new rounds of tariffs were imposed. The dip was particularly pronounced in shares of Boeing, caterpillar, and Apple.