The onshore benchmark CSI 300 Index gained as much as 1.2%, the most in nearly a month, while a gauge of Chinese stocks listed in Hong Kong rose as much as 1% to the highest since March. Both measures were among the best performers in Asia.
The US and China agreed to a preliminary deal on implementing the consensus reached in Geneva. Full details of the pact weren’t immediately available, and officials from both nations said they will take the proposal back to their respective leaders for approval.
“While we don’t have an actual deal yet, we do have something that could be classed as progress, which combined with the constructive post-meeting rhetoric from both sides may be just enough to keep tariff worries at bay for the time being,” said Tim Waterer, chief market analyst at KCM Trade in Sydney.
Talks in London came after the US and China accused each other of reneging on a deal reached in May in Geneva, where they tried to start dialing back the trade war.
Ahead of the talks, China granted approval to some applications for the export of rare earths. Boeing Co. has also begun shipping commercial jets to China for the first time since early April, indicating a reopening of trade flows.
“While the US appeared to take the lead in reviving trade talks, China may have quietly secured the upper hand,” said Hebe Chen, an analyst at Vantage Markets in Melbourne. “Beijing not only cemented the Geneva framework as a worst-case fallback, but also weaponized its dominance in rare earths to shift the negotiating balance.”
Hopes that the talks will help ease tensions and pave the way for a deal between the two nations have spurred a rebound in Chinese shares in recent weeks. The Hang Seng China Enterprises Index entered a bull market on Monday and the MSCI China Index was on course to see the same milestone on Wednesday.
Global investor sentiment toward China is improving, with increased willingness to add positions in Chinese equities and greater conviction in the “new consumption” and tech spaces, Morgan Stanley strategists including Laura Wang wrote in a recent note.
Read Also: Asian stocks edge up after US, China trade talks
