Chinese equities markets post modest weekly gains, ignoring turmoil abroad

Chinese investors largely shrugged off the much publicized fall-out between President Donald Trump and Tesla owner Elon Musk, with modest weekly gains for markets.

"The performance of Chinese markets was a bit unexpected," said Xu Gao, chief economist of BOC International (China) Co. "Compared with volatile moves of stocks in the US, Chinese markets were reserved, indicating a wait-and-see attitude among investors."

The Shanghai Composite Index edged up 0.04 percent on Friday, ending the week with a gain of 1.13 percent. The Shenzhen Component Index retreated 0.19 percent, but still wrapped up the week with a rise of 1.42 percent. However, Hong Kong's Hang Seng Index jumped 3.25 percent for the week albeit retreating 0.48 percent on Friday.

In the one-hour call between Xi and Trump on Thursday, their first personal contract since the start of the tariff war in March, China's leader urged Trump to set relations back on track, likening them to a ship off course. After the close of Asian markets, Trump said stalled trade talks between both nations will resume on Monday in London.

"The call paved the way for further dialogue," said Diao Daming, a professor at the Center for American Studies at Renmin University of China. "China expects positive changes."

Since the breakout of the tariff war, world stock markets have gyrated on each new development.

For the week just ended, the S&P 500 was up 1.5 percent, the Dow gained 1.2 and the Nasdaq rose 2.2 percent. Shares Tesla eked out a 3 percent gain on Friday after plunging 14 percent the previous day, when Musk and Trump exchanged caustic online barbs in a spectacular collapse of their friendship.

In a world rife with risks, investors have tended to diversify portfolios in a shift to assets like precious metals, bonds and cryptocurrencies. The new darling is stablecoins, which is dubbed the "cash of the digital world." Shares in Boston-based Circle, which made its New York Stock Exchange debut on Thursday, soared 168 percent.

The latest survey from the American Chamber of Commerce in China found that trade tensions are placing increased strains on US companies operating in China. The survey of 112 member companies in China found a majority of respondents saying costs are increasing and revenues are deteriorating.

"Tariffs are an added challenge for our member companies at a time when operating in China is already becoming more complex," said Alvin Liu, chair of the chamber. "But the message from this survey is clear: most US companies are not giving up on China."