January 10, 2020 / 4:26 AM / 9 days ago

China, Hong Kong stocks set for 6th weekly gain on trade optimism

* SSEC -0.3%, CSI300 -0.2%, HSI 0.1%

* HK->Shanghai Connect daily quota used 1.7%, Shanghai->HK daily quota used 4.2%

* FTSE China A50 -0.1%, BNY Mellon ADR China Select Index +0.0%

SHANGHAI, Jan 10 (Reuters) - China and Hong Kong stocks were mixed on Friday, though they were set for their sixth weekly gain, as Mideast tensions calmed while investors cheered signs of recovery in China’s economy and awaited the upcoming signing of a Sino-U.S. trade deal.

** The CSI300 index fell 0.2%, to 4,157.17 points at the end of the morning session, while the Shanghai Composite Index lost 0.3%, to 3,086.85 points.

** However, both indexes were on track for sixth week of gains in a row. The Shanghai Composite is up 0.1% for the week, while the CSI300 has gained 0.3%

** In Hong Kong, the benchmark Hang Seng index added 0.1%, to 28,576.92 points, and was also poised for sixth weekly gain, while the Hong Kong China Enterprises Index lost 0.3%, to 11,250.20 points.

** Stock indexes recouped losses earlier this week as tensions in the Middle East cooled.

** U.S. President Donald Trump said on Wednesday the United States did not have to respond militarily to Iran’s attack, while Iranian Foreign Minister Mohammad Javad Zarif said its strikes “concluded” Tehran’s retaliation.

** Investors were encouraged by signs of modest improvement in the world’s second largest economy, as Beijing rolled out more support measures.

** On Monday, state media reported China’s cabinet unveiled more measures to boost the manufacturing sector, while China on Tuesday said it will do more to help small and medium firms get funding.

** China’s consumer inflation steadied while factory-gate prices fell at a slower pace in December, giving Beijing room to stay the course on monetary easing as economic growth cools.

** Overall, the macro backdrop would be helpful for the performance of China’s equities, while the current policy environment remained loose, Wang Yang, an analyst with Soochow Securities, said in report.

** Sentiment got further support as China confirmed a date for signing of the Sino-U.S. trade deal.

** China’s Vice Premier Liu He, head of the country’s negotiation team in Sino-U.S. trade talks, will sign a “Phase 1” deal in Washington next week, the commerce ministry said on Thursday.

** Around the region, MSCI’s Asia ex-Japan stock index was firmer by 0.26% while Japan’s Nikkei index was up 0.22%.

** The yuan was quoted at 6.9335 per U.S. dollar, 0.02% weaker than the previous close of 6.9324.

** As of 04:00 GMT, China’s A-shares were trading at a premium of 26.73% over the Hong Kong-listed H-shares. (Reporting by Luoyan Liu and Andrew Galbraith; Editing by Shailesh Kuber)

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