June 5, 2020 / 5:12 AM / a month ago

China, HK stocks dip on Sino-U.S. rift, trim weekly gains

* SSEC -0.3%, CSI300 -0.3%, HSI unchanged, HSCE -0.4%

* Shanghai benchmark heads for best week since early March

* Pompeo hails Nasdaq putting curbs on Chinese firms

* China central bank drains most cash in week since mid-Feb

HONG KONG, June 5 (Reuters) - China stocks dipped on Friday ahead of a highly awaited U.S. jobs report and as Sino-U.S. tensions deepened, though the benchmark Shanghai index was set for the best week in two months on hopes that Beijing will pursue more stimulus to shore up its flagging economy.

** At the midday break, the Shanghai Composite index was down 0.3% at 2,911.58 points. ** China’s blue-chip CSI300 index was down 0.3%, with its financial sector sub-index dropping 0.6%, the consumer staples sector down 0.2%, the real estate index down 1.6% and the healthcare sub-index dipped 0.1%.

** Chinese H-shares listed in Hong Kong fell 0.4%, while the Hang Seng Index was pretty much flat at 24,370.86. ** The smaller Shenzhen index fell 0.3% and the start-up board ChiNext Composite index was also weaker by 0.3%.

** U.S.-China tensions remained high as U.S. Secretary of State Mike Pompeo said on Thursday that Nasdaq’s recent decision to tighten listing rules for China-based companies should be “a model” for all other exchanges around the world.

** The comments came after Beijing and Washington clashed throughout the week over airlines operation, Hong Kong’s trade status and human rights issues.

** For the week, the People’s Bank of China drained a net 450 billion yuan ($63.29 billion), the biggest weekly net drain since mid-February, compared with 670 billion yuan of injection on a net basis a week earlier. ** The Shanghai Composite is up 2.2% on-week, heading for its best week since early March, due to expectation of fresh policy support from the Chinese government.

* If “policy (support) continues to move forward, then it will help market confidence to rise,” analysts at Dongguan Securities said in a note.

** Around the region, MSCI’s Asia ex-Japan stock index edged up 0.3%, while Japan’s Nikkei index gained 0.5%.

** The yuan was 0.2% stronger at 7.0998 per U.S. dollar. (Reporting by Noah Sin, Editing by Sherry Jacob-Phillips)

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