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China shares rise on recovery hopes; HK slips as virus woes weigh

SHANGHAI, Sept 29 (Reuters) - Chinese stocks rose on Tuesday buoyed by hopes of sustained domestic economic recovery, but Hong Kong shares fell as global coronavirus deaths surpassed the 1-million mark. ** China’s blue-chip CSI300 index rose 0.5% to 4,603.94 by the midday break. The Shanghai Composite Index was also up 0.5% at 3,234.39. ** But shares in Hong Kong, which is more exposed to the global economy, gave up early gains as investors weighed mounting coronavirus concerns against China’s economic rebound. ** The benchmark Hang Seng index dropped 0.3% to 23,418.23, while the Hong Kong China Enterprises Index lost 0.4% to 9,342.96. ** China’s factory activity likely expanded at a slightly faster pace in September, a Reuters poll showed, adding to evidence of a steady recovery from the COVID-19 pandemic. ** It comes after official data released on Sunday showed that profits at China’s industrial firms grew for the fourth straight month in August. ** Growth in China was expected to come in at 2% this year, while the rest of the East Asia and Pacific region was projected to see a 3.5% contraction, the Word Bank estimated. ** Also aiding market sentiment is a likely sharp rebound in domestic travel during the upcoming Golden Week holiday, with some flights selling out and travel platforms reporting a surge in hotel bookings. ** Tech shares led market gains in China, with Shanghai’s Nasdaq-style STAR Market jumping nearly 4%. Chinese investors are pouring into newly-launched mutual funds targeting Ant Group’s upcoming initial public offering, underscoring strong demand for technology shares. ** But shares in Hong Kong are weighed by pandemic concerns as the pace of fatalities pick up and infections again surge in several countries such as populous India. ** Index heavyweight HSBC Holdings was also a drag, dropping 1.8% after Monday’s 9.2% surge. (Reporting by Samuel Shen and Andrew Galbraith; Editing by Rashmi Aich)

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