May 21, 2018 / 4:18 AM / 3 months ago

China, Hong Kong stocks extend climb as trade tensions ease

* SSEC 0.8 pct, CSI300 0.7 pct, HSI 1.3 pct

* Shanghai->HK daily quota used 1.4 pct

* BNY Mellon ADR China Select Index -0.2 pct

SHANGHAI, May 21 (Reuters) - China and Hong Kong stocks extended their rally on Monday, amid easing trade tensions between China and the United States after U.S. Treasury Secretary Steven Mnuchin said the U.S. trade war with China was “on hold”. ** The CSI300 index rose 0.7 percent to 3,930.86 points at the end of the morning session, while the Shanghai Composite Index gained 0.8 percent to 3,217.93 points. ** In Hong Kong, the benchmark Hang Seng index added 1.3 percent, to 31,439.88 points, while the Hong Kong China Enterprises Index gained 0.9 percent, to 12,470.29. ** The U.S. trade war with China is “on hold” after the world’s largest economies agreed to drop their tariff threats while they work on a wider trade agreement, Mnuchin said on Sunday. ** China has agreed to significantly increase its purchases of U.S. goods and services, the two countries said on Saturday, but made no mention of a $200 billion target the White House had touted earlier. ** Chinese state media on Monday praised a significant dialling back of trade tensions with the United States, saying China had stood its ground and the two countries had huge potential for a win-win business cooperation. ** “The U.S.-China agreement should provide investors some relief as a full-scale trade war has been avoided. However, this is unlikely to be the end of tension between the two countries,” said Tai Hui, Chief Market Strategist for Asia Pacific, J.P. Morgan Asset Management. ** “The good news is that markets should learn to live with it and consider its impact more rationally,” he added. ** Transport firms, in particular shipping companies, led the rally on the mainland, with Cosco Shipping Holdings up 8.9 percent. Analysts said the “ceasefire” of the trade war is positive for shipping demand and port throughput. ** Around the region, MSCI’s Asia ex-Japan stock index rose 0.47 percent while Japan’s Nikkei index was up 0.45 percent. ** The yuan was quoted at 6.3809 per U.S. dollar, 0.07 percent weaker than the previous close of 6.3767. ** The largest percentage gainers in the main Shanghai Composite index were Inner Mongolia Lantai Industrial Co Ltd up 10.05 percent, followed by CSD Water Service Co Ltd gaining 10.01 percent and Shanghai Emperor of Cleaning Hi-Tech Co Ltd up by 10 percent. ** The largest percentage losses in the Shanghai index were Shandong Tyan Home Co Ltd down 5.01 percent, followed by China Wafer Level CSP Co Ltd losing 3.61 percent and Zhejiang Huahai Pharmaceutical Co Ltd down by 3.55 percent. ** The top gainers among H-shares were China Gas Holdings Ltd up 6.99 percent, followed by Shenzhou International Group Holdings Ltd gaining 3.23 percent and PICC Property and Casualty Co Ltd up by 2.12 percent. ** The three biggest H-shares percentage decliners were China Shenhua Energy Co Ltd which has fallen 2.05 percent, China Resources Land Ltd which has lost 1.8 percent and CSPC Pharmaceutical Group Ltd down by 1.3 percent. ** As of 04:00 GMT, China’s A-shares were trading at a premium of 21.63 percent over the Hong Kong-listed H-shares.

Reporting by Luoyan Liu and John Ruwitch; Editing by Sunil Nair

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