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Hong Kong - China’s stocks rose for a second day, led by industrial and technology companies, as President Xi Jinping headed to the US for his first state visit.
The Shanghai Composite Index gained 1.7% to 3 149.60 at 08:44, reversing an earlier drop of 1.2% as volatility hovered near the 18-year highs reached last week and trading volumes slumped 36% from the 30-day average.
China Railway Group and XCMG Construction Machinery surged more than 7% in Shanghai. During Xi’s visit from September 22 to September 25, China and the US are expected to reach agreements on trade, energy, climate, finance, aviation, defense and infrastructure construction, Foreign Minister Wang Yi said last week.
Industrial companies are rallying on speculation they may see increased orders following Xi’s visit, which concludes with a summit with President Barack Obama on Friday, according to Shenwan Hongyuan Group. Deals announced before the trip include the first Chinese-made bullet-train project in the US.
“The official visit of Chinese authorities to the US is giving support to some stocks,” said Gerry Alfonso, a sales trader at Shenwan Hongyuan.
“Chinese companies are looking into expanding overseas and these official visits could be rather helpful. Technology-related stocks are clearly among a top candidate for such type of collaboration. It should be noted that there hasn’t been any announcement by either side, it is just market expectation.”
On Wednesday, Xi will tour Boeing’s wide-body jet factory north of Seattle. With China poised to eclipse the US as an aviation market, the visit might provide a setting for one of the large aircraft orders that Chinese officials often time to state visits.
A China Railway Group-led consortium and XpressWest Enterprises LLC will form a joint venture to build a high-speed railway linking Las Vegas and Los Angeles, the first Chinese- made bullet-train project in the US Construction of the 370- kilometer Southwest Rail Network will begin as soon as next September, according to a statement from Shu Guozeng, an official with the Communist Party’s leading group on financial and economic affairs.
The Hang Seng China Enterprises Index dropped 1.6% in Hong Kong, while the Hang Seng Index lost 0.9%. The CSI 300 Index rose 1.6%. The ChiNext index jumped 4.7%.
