(Bloomberg) -- Chinese stocks gained after the U.S. delayed the imposition of new tariffs on some consumer products including toys and laptops until December.
The Shanghai Composite Index was 1% higher in premarket trading Wednesday. The Hang Seng Index rose 1.7% even after protests at Hong Kong’s airport turned violent and prompted flight cancellations for a second day. The offshore yuan weakened 0.2% after jumping the most on record overnight to briefly trade stronger than 7 per dollar.
While many Chinese imports remain on the list to be hit on Sept. 1, President Donald Trump’s move on Tuesday to delay the imposition of new tariffs on some products will bring some relief to markets. When he threatened the duties earlier this month, Chinese shares reacted with a 1.5% rout, while the yuan tumbled and broke beyond the key 7-per-dollar level days later for the first time in more than a decade.
“This will spur only a short-term bounce in risk appetite, and more evidently in Hong Kong than on the mainland,” said Liang Jinxin, an analyst at Tianfeng Securities. “Everyone knows that trade friction is not going to go away overnight.”
Investors are cautious as a resolution to the trade dispute remains uncertain, while protracted tit-for-tat negotiations threaten to derail global growth and ignite a currency war. Political unrest in Hong Kong is showing no signs of easing after weeks of protests that have become more violent. Trump warned in a tweet of Chinese troops massing on the border.
