June 3, 2020 / 5:02 AM / a month ago

China stocks near three-month high, Sino-U.S. tensions cap gains

* SSEC 0.5%, CSI300 0.6%, HSI 1.2%

* HK->Shanghai Connect daily quota used 1.1%, Shanghai->HK daily quota used 1.1%

* FTSE China A50 +0.6%

SHANGHAI, June 3 (Reuters) - China stocks hit a near three-month high on Wednesday as an upbeat private survey pointed to economic recovery, though Sino-U.S. tensions capped gains.

** The CSI300 index rose 0.6% to 4,005.47 points at the end of the morning session, its highest since March 11, while the Shanghai Composite Index gained 0.5% to 2,936.38 points, its highest since March 12.

** China’s services sector returned to growth last month for the first time since January as the economy recovers from strict coronavirus-induced containment measures, although employment and overseas demand remained weak, a private survey showed.

** China’s vehicle sales are estimated to rise 11.7% year-on-year in May, its top auto industry body said on Tuesday, cementing hopes of a recovery in the world’s biggest auto market with the first back to back monthly sales increase in about two years.

** China’s coronavirus outbreak has neared its end, while various stimulative measures are having effects, with growth in investment and consumption expected to speed up, laying a foundation for the rally in the stock market, analysts at Guosen Securities said in a report.

** However, some market participants were cautious, given the simmering tensions between China and the United States.

** A survey of U.S. businesses on Wednesday revealed deep fears for the future of their operations in Hong Kong if China imposes national security legislation that critics say could curb the financial centre’s freedoms and fuel ongoing protests.

** There are huge uncertainties around the Sino-U.S. relations for now, which could impact investment decisions in the stock market, said Zhang Chengyu, vice general manager of a Beijing-based asset manager.

** In Hong Kong, the Hang Seng index rose 1.2% to 24,283.37 points, while the Hong Kong China Enterprises Index gained 1.2% to 9,991.39. (Reporting by Luoyan Liu and Andrew Galbraith; Editing by Vinay Dwivedi)

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