China stocks surge as geopolitical tensions loom

China stocks, along with other Asian markets, showed positive momentum on Thursday as investors analyzed the US interest rate outlook. Banking shares led the gains in a session where Asian stocks inched higher amidst a mixed market. The dollar paused its movement, while bond markets stabilized. Oil prices faced a decline, attributed to demand concerns and the absence of a clear response from Israel or the US following Iran's weekend attack.

By midday, the Shanghai Composite index rose by 0.55% to reach 3,088.33. The CSI300 index in China also saw an increase of 0.61%, with the financial sector sub-index leading the rise at 1.48%. On the other hand, the consumer staples sector went up by 1%, the real estate index dipped slightly by 0.05%, and the healthcare sub-index gained 0.2%. Chinese H-shares listed in Hong Kong climbed by 1.45% to 5,833.02, while the Hang Seng Index surged by 1.34% to 16,469.29.

Despite the positive market movements, investors remained cautious due to geopolitical tensions. President Joe Biden's call for higher US tariffs on Chinese metal products raised concerns, especially regarding potential repercussions on trade relations between the two countries. In the stock market, notable gainers included Traffic Control Technology Co Ltd, Sinocelltech Group Ltd, and Hunan Kylinsec Technology Co Ltd in the Shanghai Composite index, as well as Shenzhou International Group Holdings Ltd, Ping An Insurance Group Co of China Ltd, and ANTA Sports Products Ltd among H-shares.

Overall, the market sentiment in Asia remained optimistic, with MSCI's Asia ex-Japan stock index up by 1.13% and Japan's Nikkei index rising by 0.51%. The session reflected a mix of positive developments and lingering concerns, highlighting the delicate balance investors are navigating in the current economic landscape.