China’s stocks end mixed as gold shares rise, insurers weigh on Hong Kong

Mainland China's stock market experienced a mixed day on Thursday, as gold prices surged, lifting related shares, while technology stocks retreated. The Shanghai Composite Index ended up 0.6%, while the CSI300 blue-chip index slipped 0.2%. Technology shares mirrored the regional downturn, with CHINEXT, a startup board, falling 0.6%.

Higher gold prices, buoyed by a weaker dollar and lower Treasury yields, helped counteract the tech sector's decline. Spot gold reached a seven-week high amid optimism over the reopening of the Strait of Hormuz. The CSI non-ferrous metals sub-index rose 0.7%.

Trade and technology tensions between the U.S. and China persisted, but their effect on markets remained limited. William Bratton, head of cash equity research for APAC at BNP Paribas, noted that both economic and geopolitical giants are minimizing their reliance on each other's technologies, resulting in a global technological schism.

In Hong Kong, the Hang Seng Index fell 1.5%, while technology stocks dropped 2.3%. The decline was driven by insurers, who suffered losses after reports indicated that China's mainland tax authorities began imposing taxes on insurance policy income earned overseas. Prudential shares fell 4.6%, and AIA Group plummeted 6%.

Investors are now focusing on upcoming trade data for insights into China's economic health. Larry Hu, chief China economist at Macquarie, explained that China's "two-speed" economy is not just an economic phenomenon but a deliberate policy choice. Under the 'Just Enough' rule, policymakers provide just enough stimulus to meet growth targets, leaving the weak sectors like consumption and property with restrained support.