* HK->Shanghai Connect daily quota used -2.8%, Shanghai->HK daily quota used 9%
* FTSE China A50 +0.9%
SHANGHAI, March 18 (Reuters) - China stocks gained more than 1% on Wednesday as Beijing signalled support for its financial markets hit hard by the coronavirus pandemic, while a drop in locally transmitted cases in the mainland also supported sentiment.
** Expectations for more stimulus measures ran high after China’s banking and insurance regulator said on Tuesday the country has a relatively big policy space and varied tools to stabilise its financial markets against the virus onslaught.
** The CSI300 index rose 1.6% to 3,769.04 points at the end of the morning session, while the Shanghai Composite Index gained 1.3% to 2,814.70 points.
** Further bolstering sentiment, China’s finance ministry said on Tuesday it will increase export tax rebates on almost 1,500 products from March 20, looking to ease the pressure on companies reeling from disruptions caused by the virus outbreak.
** However, Goldman Sachs said on Tuesday that China’s economy will likely shrink 9% in the first quarter, underscoring how the coronavirus has disrupted normal business activities.
** The A-share market remains more resilient than overseas peers, mainly due to Beijing’s effective virus control and A-shares’ low valuations, Deng Lijun, an analyst with Northeast Securities, said in a report.
** Imported coronavirus cases in China outnumbered cases of location transmission for the fifth straight day as infected travellers passed through major Chinese transportation hubs in Beijing, Shanghai, Guangzhou and Shenzhen.
** Mainland China had 13 new confirmed cases of coronavirus infections on Tuesday, the country’s National Health Commission said, down from 21 cases a day earlier. Of the new cases, 12 involved infected travellers arriving from abroad.
** In Hong Kong, stocks were roughly flat.
** The Hang Seng index added 0.1% to 23,281.59 points, while the Hong Kong China Enterprises Index inched down 0.1% to 9,211.64.
** Around the region, MSCI’s Asia ex-Japan stock index was weaker by 0.79%, while Japan’s Nikkei index was up 1.11%.
** The yuan was quoted at 7.0089 per U.S. dollar, slightly weaker than the previous close of 7.006.
** As of 0432 GMT, China’s A-shares were trading at a premium of 32.41% over the Hong Kong-listed H-shares. (Reporting by Luoyan Liu and Andrew Galbraith; Editing by Devika Syamnath)