August 7, 2025

Get ready for an exciting market buzz! Shanghai’s stock market reached a bright new high, closing at 3,633.99 points, the best in over 3.5 years, as traders cheered fresh hopes for a US-China trade deal. This magical jump came after US President Donald Trump shared upbeat words saying, "We're getting very close to a deal. We're getting along with China very well," and promised a meeting with China’s leader Xi Jinping by year-end if the deal is finalized. The Shanghai Composite index didn’t stop there—it rose for the third day in a row, while the blue-chip CSI300 index also gained 0.24%. Investors poured into defense and coal shares, which popped up 2.65% and 2.21%, lighting up the market. But it’s not all smooth sailing yet. Winnie Chwang, portfolio manager at Matthews Asia, said, "I do sense that, while there's been a bit more interest in revisiting the Chinese markets, there are also still investors that sit on the fence, primarily given the still uncertain nature of trade, and it's very difficult to make any sort of confident predictions." Her words show cautious hope. Another market expert, Jason Lui from BNP Paribas, explained a smart move by China: "By re-imposing the VAT, policymakers may have aimed to redirect funds from the rates market to the equity and the credit market." This step fits nicely with China's goal to "strengthen the improving momentum in the capital market," as stated in the latest Politburo meeting. Meanwhile, just across the border in Hong Kong, the Hang Seng Index climbed a tiny 0.03% to 24,910.63 points. However, the Hang Seng China Enterprises index dipped slightly by 0.21%, showing mixed feelings in the market. Eyes are now on the coming economic reports showing trade data on Thursday and inflation figures on Saturday. These numbers will act like a crystal ball, revealing if the market’s optimism has a strong base or if there are storm clouds ahead. With China’s export growth expected to slow as factories wait nervously for trade clarity, market watchers will keep a close watch. Will Trump and Xi break the deal deadlock or will tariffs return to haunt markets? Stay tuned for a gripping financial drama! For the latest on Sensex, Nifty, expert stock tips, and budget updates, follow ETMarkets and get fast alerts on Telegram and WhatsApp.

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Tags: Shanghai stock market, Us-china trade deal, Trump, Defense shares, Coal shares, Hong kong hang seng, Economic data,