China stocks set to snap two-week losing streak; HK rises

Credit: REUTERS/TYRONE SIU

China stocks rose on Friday, on track for a weekly gain, as investors bet on beaten-down financials and real estate sectors on hopes of a rebound in business activity from the coronavirus-induced lockdown.

SSEC 0.6%, CSI300 0.6%, HSI 0.3%

HK->Shanghai Connect daily quota used 4.6%, Shanghai->HK daily quota used 0.9%

FTSE China A50 +1.0%

SHANGHAI, Sept 18 (Reuters) - China stocks rose on Friday, on track for a weekly gain, as investors bet on beaten-down financials and real estate sectors on hopes of a rebound in business activity from the coronavirus-induced lockdown.

** The CSI300 index .CSI300 rose 0.6% to 4,659.73 points at the end of the morning session, while the Shanghai Composite Index .SSEC gained 0.6% to 3,289.02 points.

** For the week, CSI300 gained 0.7% while SSEC climbed 0.9%, both snapping a two-week losing streak.

** Leading gains on Friday, the CSI300 financials index .CSI000951 climbed 1.4%, while the CSI300 banks index .CSI000951 added 0.9%.

** There is evident room for an recovery in banking sector's valuations, which are at historically low levels, analysts at VANHO Securities noted in report, adding that lenders now face less pressure given the country's continued economic recovery.

** The STAR50 index .STAR50, a benchmark tracking China's tech-heavy STAR Board, rose 0.6% on Friday and gained 6% for the week, as investors cheered regulators' nod to the first batch of exchange-traded funds (ETFs) tracking the index.

** However, analysts urged caution citing worries over lofty valuations and various external risks.

** Prudent investors could opt for a "wait-and-see" attitude for now as the A-share market is still in a stage of digesting high valuations in some sectors, while there are still uncertainties around geopolitical situations, Yuekai Securities said in a report.

** China will make a "necessary response" to a visit by U.S. Undersecretary for Economic Affairs Keith Krach to Chinese-claimed Taiwan, and has lodged a complaint with Washington, the foreign ministry said on Thursday ahead of his arrival.

** Investment between the United States and China tumbled to a nine-year low in the first half of 2020, hit by bilateral tensions that could see more Chinese companies come under pressure to divest U.S. operations, a research report said.

** The Hang Seng index .HSI added 0.3% to 24,416.50 points, while the Hong Kong China Enterprises Index .HSCE gained 0.4% to 9,768.28.

(Reporting by Luoyan Liu and Andrew Galbraith, Editing by Sherry Jacob-Phillips)

((luoyan.liu@thomsonreuters.com; Reuters Messaging: luoyan.liu.thomsonreuters.com@reuters.net))

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