China and Hong Kong stocks rise as liquidity, virus worries ease

* SSEC gains 0.6%, CSI300 up 1.1%, HSI rises 1.8%

* HK->Shanghai Connect daily quota used 0.4%, Shanghai->HK daily quota used 9.3%

* FTSE China A50 +0.8%

SHANGHAI, Feb 2 (Reuters) - China and Hong Kong stocks climbed on Tuesday, helped by easing concerns about tight liquidity conditions and falling cases of new coronavirus infections.

** The CSI300 index rose 1.1% to 5,477.39 points at the end of the morning session, while the Shanghai Composite Index gained 0.6% to 3,524.42 points.

** The Hang Seng index jumped 1.8% to 29,419.35 points, while the Hong Kong China Enterprises Index gained 2.2% at 11,707.28 points.

** Leading the gains on the mainland, the CSI300 consumer discretionary index and CSI300 healthcare index added 3.6% and 2.1%, respectively.

** In Hong Kong, the Hang Seng tech index and the Hang Seng industrials index climbed 3.2% and 3.9%, respectively.

** China’s short-term money rates eased to two-week lows on Tuesday, as signs of liquidity tension in the interbank money markets started to fade.

** Persistent tight liquidity conditions recently fuelled speculation that the People’s Bank of China (PBOC) may be tightening policy and led to a sharp correction the previous week.

** Adding to market optimism, China reported the fewest new COVID-19 cases in a month as imported cases overtook local infections.

** Traders and analysts said China’s continued economic recovery helped support equities, however some have started to worry about lofty valuations and turned their eyes to Hong Kong market via the Stock Connect.

** “Market volatility could substantially increase, as valuations of the whole A-share market stand at historically high levels,” Qin Bo, an analyst with Everbright Securities, said in a note.

** If the fast rise in asset prices, in particular property prices in the country’s tier one cities, is not curbed effectively, Beijing’s marginal policy tightening could exceed market expectations, Qin said.

** Bucking the broad rally, Shanghai International Airport tumbled by its 10% daily trade limit for a second session after the company flagged a loss for 2020. (Reporting by Luoyan Liu and Andrew Galbraith; Editing by Amy Caren Daniel)