May 21, 2019 / 7:35 AM / a month ago

China stocks gain after U.S. temporarily eases Huawei restrictions

* SSEC +1.23%; CSI300 +1.35%

* Easing of restrictions on Huawei lifts IT firms

* Rare earths producers surge after Xi visit

* Yuan strengthens toward 6.9 per dollar

SHANGHAI, May 21 (Reuters) - Chinese shares finished higher on Tuesday as investors took heart from the temporary easing of U.S. trade restrictions on Chinese telecoms firm Huawei.

** At the close, the Shanghai Composite index was up 1.23% at 2,905.97. The blue-chip CSI300 index ended 1.35% higher. ** Washington on Monday temporarily eased trade restrictions imposed last week on China’s Huawei Technologies Co Ltd in an attempt to minimise disruption for its customers. But Huawei’s founder, Ren Zhengfei, dismissed the move and said that the tech firm had prepared for U.S. action. ** The easing of restrictions and Ren’s comments boosted Huawei suppliers and helped to lift broader market sentiment. A CSI sub-index tracking information technology stocks gained 2.37%, outperforming the broader market. ** Companies in the rare earths sector surged amid speculation that the materials might be used as countermeasures in the Sino-U.S. trade spat, after Chinese President Xi Jinping visited Jl Mag Rare-Earth Co Ltd, a producer in southern China, on Monday. Jl Mag Rare-Earth jumped by the daily 10% limit on Tuesday, leading gains across the sector. ** Financial firms gained 0.88%, the consumer staples sector rose 1.01%, real estate companies ended up 0.88% and healthcare firms added 1.45%. ** The smaller Shenzhen index ended up 1.77% and the start-up board ChiNext Composite index was higher by 1.66%. ** Around the region, MSCI’s Asia ex-Japan stock index weakened by 0.03% as the easing of Huawei restrictions failed to overcome fears of a further escalation in tensions, while Japan’s Nikkei index closed down 0.14%. ** At 07:17 GMT, the yuan was quoted at 6.9115 per U.S. dollar, 0.03% firmer than the previous close of 6.9133. ** The largest percentage gainers in the main Shanghai Composite index were Henan Yuguang Gold & Lead Co Ltd, up 10.12%, followed by Zhongmin Energy Co Ltd, gaining 10.07%, and Ningbo Boway Alloy Material Co Ltd, up by 10.06%. ** The largest percentage losers in the Shanghai index were Elion Energy Co Ltd, down 10%, followed by Shanghai Yahong Moulding Co Ltd, losing 10%, and Harbin High-Tech Group Co Ltd, down by 6.58%. ** So far this year, the Shanghai stock index is up 16.5% and the CSI300 has risen 21.8%, while China’s H-share index listed in Hong Kong is up 5.2%. Shanghai stocks have declined 5.6% this month. ** Trading volumes were relatively low, with only about 21.14 billion shares traded on the Shanghai exchange, roughly 68.6% of the market’s 30-day moving average of 30.81 billion shares a day. (Reporting by Andrew Galbraith; Editing by Subhranshu Sahu)

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