* Shanghai shares add 1.7%, blue-chips up 1.9%
* China to halve some U.S. tariffs starting on Feb. 14
* Jump follows a global rebound on drug discovery rumours
HONG KONG, Feb 6 (Reuters) - China shares rose for a third session on Thursday after Beijing said it will soon halve tariffs levied against some U.S. goods, in an apparent move to boost business and investor confidence amid a virus outbreak that has disrupted economic activity.
** The Shanghai Composite index closed 1.7% higher at 2,866.51. The blue-chip CSI300 index was up 1.9%. ** During the session, both indexes hit their highest level since Jan. 23, just before the markets closed for Lunar New Year break when the coronavirus spread further. ** CSI300’s financial sector sub-index rose 1.3%, the consumer staples sector climbed 2.5%, the real estate index was up 0.9% and the healthcare sub-index was up 2.9%. ** The smaller Shenzhen index rose 2.9% and the start-up board ChiNext Composite index gained 3.7%. ** China said it will halve tariffs on some goods imported from the United States starting on Feb. 14, and reiterated that it hopes it can work with Washington to eventually scrap all tariffs in bilateral trade. ** “This helps shift the focus a bit,” said Linus Yip, chief strategist at First Shanghai Securities. “Long-term investors have been allocating Chinese equities since Monday’s drop. Any good news would accelerate that, and anything that helps fight the epidemic or the economy is good news.” ** Domestic markets were also lifted by a global rally late Wednesday that traders attributed to vague rumours of a possible vaccine or a drug breakthrough for the virus, although they also said such catalysts were likely to be an excuse for short-covering. ** The World Health Organization played down such reports of “breakthrough” of drug discovery on Wednesday. ** Stocks this week have been aided by policymakers’ efforts to prevent heavy selling, including liquidity injections and de facto restrictions on selling. ** “We believe market valuations currently are relatively attractive, (we) can also expect adjustment policy (support),” analysts at Galaxy Securities wrote in a report, although they added it will take time for stocks to recover. ** Pictet Asset Management’s multi-asset strategy team said they have reduced equities “across the board” in Hong Kong and mainland China as these are “economies that are most affected” by the coronavirus. ** So far this year, the Shanghai stock index is down 6% and the CSI300 has fallen 4.8%. ** About 31.64 billion shares were traded on the Shanghai exchange. The volume in the previous trading session was 30.98 billion. (Reporting by Noah Sin in Hong Kong; editing by Uttaresh.V)