June 30, 2020 / 5:05 AM / a month ago

HK, China stocks gain as upbeat U.S., China data boost recovery hopes

SHANGHAI, June 30 (Reuters) - Hong Kong shares tracked other Asian markets higher on Tuesday, as upbeat U.S. and China data renewed economic recovery hopes and offset worries about U.S. sanctions against the city over Beijing’s national security law.

** China shares also climbed. Shenzhen’s tech-heavy start-up board ChiNext jumped over 2% to over four-year highs, amid heightened Sino-U.S. tensions.

** At the lunch break, the Hang Seng index rose 0.9%, to 24,516.44, while the Hong Kong China Enterprises Index, which tracks Hong Kong-listed Chinese companies, gained 0.6%, to 9,818.17. ** On the mainland, the blue-chip CSI300 index rose 1.1% to 4,154.29. The Shanghai Composite Index climbed 0.6% to 2,978.56.

** Washington moved to suspend Hong Kong’s preferential treatment under the U.S. law, punishing China, which on Tuesday passed national legislation for the former British colony. Pro-democracy activists and some western governments say the law will erode Hong Kong’s high degree of freedom.

** After previous comments from the U.S. administration, “this move is not entirely surprising,” Citi analysts said in a note. Also, Washington revoking its special status “may not materially affect Hong Kong economically.”

** Investors cheered overnight Wall Street gains on strong U.S. housing data, as well as China’s announcement of a cross-border wealth management scheme linking Hong Kong, Macau, and their neighbouring cities on the mainland.

** The sentiment was also boosted by data showing China’s manufacturing sector grew more than expected in June. The official manufacturing Purchasing Manager’s Index (PMI) came in at 50.9 in June, compared with May’s 50.6.

** “These rising PMIs suggest China’s recovery is still on track,” Nomura economists wrote in a note, but cautioned that the recovery momentum could lose some steam in coming months. ** Sectors rose across the board in China and Hong Kong. Shenzhen’s ChiNext board continued to power ahead, touching levels last seen in January, 2016. (Reporting by Samuel Shen and Andrew Galbraith; Editing by Rashmi Aich)

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