March 20, 2020 / 5:04 AM / 9 days ago

China shares higher but gains muted as key rate left unchanged

* Shanghai Composite +0.47%, CSI300 +0.59%

* Hong Kong’s Hang Seng +2.81%

* China surprises with no LPR cut; fiscal stimulus planned

SHANGHAI, March 20 (Reuters) - Chinese shares edged higher on Friday as wider Asian equities bounced back from a rout set off by coronavirus fears, but sentiment was relatively subdued after the country left its lending benchmark unchanged.

** At the midday break, the Shanghai Composite index was up 0.47% at 2,714.77 points. Around the region, MSCI’s Asia ex-Japan stock index was firmer by 2.83%, as Asian shares staged a rally after seven sessions of losses. ** China’s blue-chip CSI300 index was up 0.59% at midday, but was still on track for its worst week since October 2018. ** The financial sector sub-index was 0.78% higher, while the consumer staples sector rose 1.21%. The real estate index added 1.61% and the healthcare sub-index climbed 0.96%. ** The relatively small gains came after China kept its benchmark lending rate unchanged, defying expectations for a cut to ease borrowing costs in an economy jolted by widespread disruptions to businesses from the virus outbreak. ** However, the country is set to unleash trillions of yuan of fiscal stimulus to revive an economy expected to shrink for the first time in four decades amid the virus pandemic, four policy sources told Reuters. ** China’s coronavirus infections from abroad hit a new daily record on Thursday, pressuring authorities to hold the bar high on already tough custom rules and public-health protocols. ** Chinese H-shares listed in Hong Kong rose 3.42% to 8,852.39, while the Hang Seng Index was up 2.81% at 22,318.82. ** The smaller Shenzhen index inched up 0.17% and the start-up board ChiNext Composite index was unchanged. ** The yuan was quoted at 7.0862 per U.S. dollar, 0.36% firmer than the previous close of 7.1119. ** So far this year, the Shanghai stock index has lost 11.41%, while China’s H-share index is down 23.4%. Shanghai stocks have declined 6.19% this month. (Reporting by Andrew Galbraith; Editing by Devika Syamnath)

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