* Shanghai Composite rises 1.3 pct, CSI300 ends 1.4 pct higher
* Another Trump-Xi meeting on the cards after latest trade talks
* Stocks rally despite factory activity shrinking most in 3 years
HONG KONG, Feb 1 (Reuters) - Chinese shares rose ahead of the week-long Lunar New Year holidays, as Beijing and Washington progressed with trade negotiations, with investors shaking off worries about further econmoic slowdown for now.
** At the close, the Shanghai Composite index was up 1.3 percent at 2,618.23. On a weekly basis, it ended 0.6 percent higher this week. ** The blue-chip CSI300 index was up 1.4 percent on Friday, climbing almost 2 percent week-on-week. ** CSI300’s financial sector sub-index higher by 0.6 percent, the consumer staples sector up 1.3 percent, and healthcare shares rose 3.7 percent. ** The smaller Shenzhen index jumped 2.8 percent and the start-up board ChiNext Composite index rallied 3.5 percent. ** U.S. President Donald Trump said on Thursday he will meet with Chinese President Xi Jinping soon to try to seal a comprehensive trade deal, noting that Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin were invited to bring a U.S. negotiating team to Beijing around mid-February. ** The two leaders met in Argentina in early December and agreed to a 90-day truce in the trade war. ** The comment came after the latest round of Sino-U.S. trade talks in Washington, and a meeting between Trump and Liu He, Chinese vice premier. The Chinese delegation said in a statement that the two days of high-level talks made “important progress,” official Xinhua news agency reported. ** China’s factory activity shrank by the most in almost three years in January as new orders slumped further and output fell, a private survey showed. ** The gloomy readings were more downbeat than an official survey on Thursday, which also showed growing strains on China’s manufacturing sector, a key source of growth and jobs. ** But progress in the trade talk was enough to offset worries about factory activity falling further, said Cao Xuefeng, head of research at Chengdu-based Huaxi Securities. This week’s data “was somewhat affected by the Sino-U.S. trade war,” he said. * Around the region, MSCI’s Asia ex-Japan stock index was weaker by almost 0.1 percent, while Japan’s Nikkei index closed up 0.1 percent. ** The largest percentage gainers on the main Shanghai Composite index were shares of EGing Photovoltaic Technology Co Ltd , up 10.2 percent, followed by Beijing Jingyuntong Technology Co Ltd, gaining 10.1 percent and Shanghai Daimay Automotive Interior Co Ltd, up by 10 percent. ** The largest percentage losers on the Shanghai index were shares of Dasheng Times Cultural Investment Co Ltd and Zhejiang Kanglongda Special Protection Technology Co Ltd , both down 10.01 percent, followed by Y.U.D. Yangtze River Investment Industry Co Ltd, down by 9.9 percent. ** The Shanghai stock index is up 5 percent so far this year, while the CSI300 has risen 7.9 percent. ** About 13.2 billion shares were traded on the Shanghai exchange. The volume in the previous trading session was 15.4 billion. ** As of 07:50 GMT, China’s A-shares were trading at a premium of 16.82 percent over the Hong Kong-listed H-shares. ** The Shanghai stock index is above its 50-day moving average and below its 200-day moving average. (Reporting by Noah Sin; Editing by Rashmi Aich)