* Hang Seng adds 0.3%, H-shares rise 0.5%
* Tone cautious as U.S., China restart trade talks over the phone
* Fed chair to speak this week; markets pare hopes for big cuts
HONG KONG, July 10 (Reuters) - The Hong Kong stock market ended higher on Wednesday in thin trade, as Beijing and Washington restarted trade talks, while investors were cautious ahead of U.S. Federal Reserve Chairman Jerome Powell’s congressional testimony later in the day. ** At the close of trade, the Hang Seng index was up 0.3% at 28,204.69. The Hang Seng China Enterprises index rose 0.5%. ** The sub-index of the Hang Seng tracking energy shares rose 0.6%, while the IT sector rose 1.4%, the financial sector ended 0.2% lower and the property sector rose 0.2%. ** The top gainer in the Hang Seng index was CSPC Pharmaceutical Group Ltd, which gained 4.1%, while the biggest loser was AIA Group Ltd, which fell 0.7%. ** Around the region, MSCI’s Asia ex-Japan stock index was firmer by 0.4%, while Japan’s Nikkei index closed down 0.2%. ** U.S. and Chinese trade officials held a “constructive” phone conversation on Tuesday, White House economic adviser Larry Kudlow said, marking a new round of talks after the world’s two largest economies agreed to a truce in a year-long trade war. ** However, Kudlow cautioned “there are no miracles here,” noting the breakdown of previous talks. The Chinese commerce ministry said in a short statement on Wednesday the two sides “exchanged views on implementing the (G20) consensus,” and gave no other details. ** China’s producer prices flatlined in June on lower oil prices and weak global demand, fuelling concerns that a slowdown in manufacturing from a bruising trade war will further drag on growth in the world’s second-biggest economy. ** All eyes are on Powell, who will testify before the U.S. Congress on Wednesday and Thursday local time. Markets have been scaling back on expecting a large Fed cut following Friday’s upbeat jobs data. ** About 1.04 billion Hang Seng index shares were traded, not far from the five-month low of 873 million shares reached on July 5. The volume traded on Tuesday was 1.26 billion. ** At close, China’s A-shares were trading at a premium of 27.74% over Hong Kong-listed H-shares.
Reporting by Noah Sin; Editing by Rashmi Aich