HK shares flat as sour sentiment in Asia offsets China optimism

April 27 (Reuters) - Hong Kong stocks ended flat on Wednesday, as weakness in broader Asia offset optimism from equity markets on the mainland where investors bet on pro-growth policies from Beijing.

** The Hang Seng index closed flat at 19,946.36 points, while the China Enterprises Index ended 0.6% higher at 6,786.02 points.

** Asian shares broadly weakened amid a global stock sell-off, as investors pared holdings in risky assets, and sought safe havens in U.S. dollar and treasuries.

** But China stocks rebounded sharply from two-year lows, buoyed by hopes that the country would prioritise economic growth and fine-tune its draconian anti-virus policies.

** The official People’s Daily reiterated the “zero tolerance policy” in the fight against COVID-19, but said “at current stage, our goal is to eliminate outbreaks”, rather than the virus, or the disease.

** “My interpretation is that the author indicates the authorities may have recognised the virus and the disease cannot be fully eliminated,” wrote Zhiwei Zhang, president and chief economist at Pinpoint Asset Management. “If that’s the case, it would be a subtle yet important change of policy stance.”

** Hong Kong market remains clouded by COVID outbreaks on the mainland, and heightened geopolitical tensions.

** Authorities in capital Beijing raced to stamp out a nascent outbreak and avert the debilitating city-wide lockdown that has shrouded Shanghai for a month. Also, China’s military condemned the United States after a U.S. warship sailed through the sensitive Taiwan Strait.

** The Hang Seng Tech Index rose 1.7%, while the industrial sector gained 2.7%.

** But property shares remained sluggish, down 1.3%.

** Reminding investors of lingering woes in the sector, China Evergrande Group’s flagship unit Hengda Real Estate Group Co Ltd said its creditors have approved a six-month extension of a coupon payment for an onshore bond that was due on Wednesday.

Reporting by the Shanghai Newsroom; Editing by Sherry Jacob-Phillips