China stocks closes at six-month high as Middle East truce lifts sentiment
SHANGHAI, June 25 (Reuters) - Shanghai stocks closed at a more-than-six-month high on Wednesday, while Hong Kong ended at its loftiest since March, boosted by a ceasefire between Israel and Iran, as well as some hopes of an earlier-than-expected U.S. Federal Reserve rate cut.
The ceasefire brokered by U.S. President Donald Trump between Iran and Israel appeared to be holding on Wednesday, a day after both countries signalled that their air war had ended, at least for now.
"Tensions between Iran-Israel will be eyed as financial markets remain hopeful that a delicate ceasefire between the two nations would hold," analysts at UOB said in a note.
At the close, the Shanghai Composite index .SSEC was up 1.04% at 3,455.97 points, the highest close since December 12, 2024.
The blue-chip CSI300 index .CSI300 was up 1.44% at 3,960.07 points, the highest closing level since March 20.
The smaller Shenzhen index .SZSC ended up 1.41% and the start-up board ChiNext Composite index .CNT was higher by 3.113%.
Brokerage shares led the gains, with CSI securities sub-index .CSI399707 rallying 5.48%. Defence shares were also among top winners, with the sub-index .CSI399973 jumping 3.68%.
Meanwhile, China's Premier Li Qiang said on Wednesday that he was confident the country could maintain a "relatively rapid growth rate" and transition from a manufacturing-led economy to a consumer-driven one.
In Hong Kong, the Hang Seng index .HSI was up 1.23% at 24,474.67 points, the highest closing level since March 19. The Hang Seng China Enterprises index .HSCE rose 1.13% to 8,859.29 points.
Separately, Fed Chair Jerome Powell said on Tuesday that higher tariffs could begin raising inflation this summer, a period that will be key to the U.S. central bank considering possible interest rate cuts.
"While Powell reiterated the message that Fed need not rush to cut, he did suggest that the Fed may cut rates sooner rather than later if inflation pressures remain contained," OCBC analysts said in a note. "But he was careful in not committing to a timeline."
Fed rate cuts could aid Hong Kong stocks as they are closely tied to global monetary policy shifts.
Related Articles
Nikkei Index Heading Toward 60,000? Why Is Global Capital Betting on Sanae Takaichi? Will Japan’s Stock Market Continue to Hit New Highs in 2026?
TradingKey - In February 2026, the Tokyo stock market once again became the epicenter of global financial markets. Following a landslide victory by the Sanae Takaichi-led Liberal Democratic Party in the Lower House elections, the Nikkei 225 Index hit consecutive record highs within just a few days, targeting the 60,000-point milestone.
Will Micron Be the 2026 AI Winner as the Memory Supercycle Begins?
Recently, Micron has focused on premium areas such as High-Bandwidth Memory that plays alongside accelerators to feed AI models, and adding capacity with an eye on pricing discipline.
Stock Market Crash 2026: What Fed Signals and Economic Data Mean for Investors
TradingKey - The possibility of a stock market crash occurring in 2026 is becoming increasingly likely as investor sentiment continues to decline.
New Fed Chair Warsh Takes Office: Major Shift in Monetary Policy? US Dollar Short-Term Rebound, 2026 Investment Strategy Analysis
TradingKey - At the start of 2026, global financial markets witnessed a major leadership change as U.S. President Trump officially nominated Kevin Warsh as the next Federal Reserve Chair. Pending Senate confirmation, he will succeed Jerome Powell this May to lead the world’s most influential central bank.
