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Stocks climb as US Senate calls for more say on tariffs

By Cai Xiao and Zhou Lanxu | China Daily | Updated: 2018-07-13 13:05
Investors sit in front of an electronic stock board at a securities brokerage in Shanghai, June 9, 2017. [Photo/VCG]

Stocks on the Chinese mainland rose on Thursday, reversing Wednesday's slump, as the US Senate overwhelmingly passed a resolution curtailing US President Donald Trump's power to impose tariffs and China's central bank set a stronger daily currency fixing than traders had expected.

The Shanghai Composite Index climbed 2.16 percent at the close to 2837.66 points, notching up its second 2 percent plus move this week.

The Shenzhen Component Index closed 2.77 percent higher at 9273.61 points. The ChiNext Index, which tracks China's growth enterprises board, jumped 3.30 percent to close at 1614.63 points.

At close, a total of 3,243 A-shares ended up on Thursday, while 97 shares ended lower. In contrast, just 358 stocks rose on Wednesday.

Technology stocks placed gains after Chinese telecoms equipment maker ZTE Corp signed a deal with the US Commerce Department to resume doing business with US suppliers. ZTE soared by the daily limit of 10 percent as soon as trading started on Thursday.

Besides ZTE, another eight communication equipment stocks hit daily increase limits, including Eoptolink Technology Inc Ltd, T&S Communications Co Ltd and Jiangsu Zhongtian Technology Co Ltd.

Electronics, securities, pharmaceutical and liquor shares also saw strong gains.

"Thursday's stock market rose as the US Senate took the first step to rein in the president's abuse of trade authority by using national security as justification to levy tariffs," said Dong Dengxin, a finance professor at the Wuhan University of Science and Technology.

In an 88-11 vote on Wednesday, the US Senate approved a symbolic motion backing a role for Congress in requiring tariffs based on national security, such as those Trump imposed on steel and aluminum imports and is contemplating doing the same for autos. The vote came a day after the administration said it would impose a new round of 10 percent tariffs on $200 billion worth of Chinese goods.

Liu Feng, chief economist at China Galaxy Securities Co Ltd, said the trade conflict is expected to ease as the Trump administration would not want to bear the huge pressure from US citizens and large companies.

The offshore yuan traded at 6.6766 per dollar after falling to 6.7249 overnight. The People's Bank of China set the daily reference rate at 6.6726, stronger than estimates compiled by Bloomberg. The onshore currency climbed 0.2 percent.

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