China stocks rise despite weak trade data; Hong Kong up

Big 5

China shares inched up on Monday morning, as a surge in coal stocks and sustained interest in property shares ignited by the Vanke drama offset the impact of worse-than expected trade data.

Hong Kong equities rose to eight-month highs, as strong U.S. jobs data on Friday lifted risk appetites globally.

Both China’s blue-chip CSI300 index .CSI300 and the Shanghai Composite Index .SSEC climbed 0.3 percent, reaching 3,214.64 points and 2,984.44 points, respectively.

On the macro front, China’s exports and imports fell more than expected in July, making a rocky start for the third quarter and suggesting global demand remains weak in the aftermath of Britain’s decision to leave the European Union.

Jiang Chao, analyst at Haitong Securities, said that in a slowing economy, investors should allocate more assets to bonds, as well as stocks with stable performance.

Market sentiment on Monday was lifted by a surge in coal stocks, after reports that borrowings by seven major coal miners in Shanxi will be rolled over to medium-to-long-term special loans, as the government aids the struggling sector.

Major coal miners including Xishan Coal and Electricity Power (000983.SZ), Luan Environmental Energy (601699.SS) and Yanzhou Coal (1171.HK)(600188.SS) all jumped nearly 10 percent.

Meanwhile, the real estate sector .CSI300REI maintained strong upward momentum, gaining 2.5 percent by midday, as drama and share acquisitions involving Vanke (000002.SZ) continued to stir excitement.

Vanke, which soared around 17 percent in the past two sessions on news of share purchases by rival Evergrande (3333.HK), surged another 4.1 percent by midday. Evergrande also jumped over 4 percent in Hong Kong.

But gold stocks dropped, following sharp falls in the metal’s price, as the dollar rose after U.S. data showed employment increased more than expected in July, raising the probability of a U.S. rate hike this year.

The upbeat employment data led global investors to flock to higher-yielding assets.

Hong Kong’s Hang Seng index .HSI added 1.2 percent, to 22,421.25 points, while the Hong Kong China Enterprises Index .HSCE gained 1.1 percent, to 9,228.64.

Source: Reuters