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China stocks buoyed by Xiongan economic zone optimism

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Dozens of Xiongan New Area related stocks surged by the 10pc daily limit on Wednesday, driven by optimism over development prospects for the region. Photo: Reuters

Hong Kong and Shanghai stocks traded higher on Wednesday in a post-holiday rally as market sentiment was boosted after China announced a “historic” plan to set up a special economic zone near Beijing to reduce pollution and alleviate traffic congestion.

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Investors shook off earlier caution ahead of a closely-watched summit between Chinese President Xi Jinping and his US counterpart Donald Trump due to begin on Thursday.

The Hang Seng Index briefly dipped into negative territory but turned higher in late afternoon trading to close up 0.6 per cent or 139.32 points at 24,400.8.

The Hang Seng China Enterprises Index, known as the H-shares index, rose 0.5 per cent or 50.8 points to 10,365.32.

Turnover spiked more than 60 per cent to HK$102.5 billion from the previous session.

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“Market sentiment was buoyed by the establishment of Xiongan new district,” said Ken Cheung Kin Tai, a strategist for Mizuho Bank.

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