China, Hong Kong Stocks Rise Amid US-China Trade Truce Extension Talks

China and Hong Kong stock markets rose amid optimism over the extension of the U.S.-China tariff truce, preventing the implementation of steep tariffs on Chinese goods. The Shanghai Composite and CSI300 indexes increased, buoyed by gains in sectors such as liquor, AI, and technology, with significant rallies in lithium and tech stocks. Despite these gains, investors remain cautious due to persistent deflationary pressures in China, marked by a long streak of producer price declines and stagnant consumer prices. Market participants are also focused on upcoming earnings reports from major companies like Tencent and Alibaba, as well as the potential easing of U.S. export controls on AI chips ahead of a possible summit between Presidents Trump and Xi Jinping. Analysts suggest that while the trade talks currently support market gains, significant impacts on A-shares may await further developments, including the anticipated presidential meeting. Overall, the market response reflects a wait-and-see approach amid ongoing trade negotiations and economic data.