February 10, 2017 / 5:14 AM / 7 months ago

China stocks rise as infrastructure sector rallies; HK gains

* SSEC +0.4 pct, CSI300 +0.4 pct, HSI +0.6 pct

* China to push “One Belt, One Road” initiative

* Hong Kong sentiment lifted on Trump tax talk

SHANGHAI, Feb 10 (Reuters) - China stocks edged higher on Friday morning, on track for their best week in 2-1/2-months, with infrastructure stocks hitting 10-week highs on a big policy boost.

Hong Kong stocks climbed to a fresh four-month high, drawing inspiration from Wall Street’s gains on promises of tax cuts.

Sentiment was lifted after Wall Street’s three main indexes notched record highs on Thursday as President Donald Trump said he would make a major tax announcement in a few weeks, though he offered no details.

News that the U.S. President and China’s President Xi Jingping had a cordial telephone conversation, in which Trump affirmed the one-China policy on Taiwan, appeared not to move the market.

China’s blue-chip CSI300 index and the Shanghai Composite Index rose 0.4 percent each, to 3,409.74 points and 3,196.74 points, respectively at the lunch break.

The blue-chips have added 1.3 percent so far this week and would post their best week since Nov 25, 2016, if their gains hold through the afternoon session.

China’s Ministry of Commerce said the “One Belt One Road” held “significant meaning” despite slow cost recovery and China would push its “One Belt, One Road” initiative to benefit surrounding countries, Xinhua News Agency reported on Thursday.

Further lifting optimism for infrastructure plays, China pledged to invest over $146 billion on transport in the country’s mid-west this year.

A gauge of stocks related to the “One Belt One Road” project touched a 10-week high in early trading and had added 2.2 percent at midday.

Market reaction to China’s better-than-expected trade data in January was largely muted.

“The market is more sensitive to capital inflows. We can see a gradual increase since the Lunar New Year. Trade data might have lifted sentiment in some industries, but not necessarily boosted the whole market at the moment,” said Zhang Qi, analyst at Haitong Securities.

Brokerage shares barely moved after state media reported China’s securities regulator would launch nationwide inspections into brokerages’ investment banking businesses.

In Hong Kong, the Hang Seng index added 0.6 percent, to 23,655.28 points, while the Hong Kong China Enterprises Index gained 0.9 percent, to 10,170.38 points.

The main index had gained 2.3 percent since Monday.

Most sectors in Hong Kong gained ground by the lunch break.

The energy sector rallied 1.7 percent, with a boost from oil majors PetroChina Co Ltd and CNOOC Ltd .

Bucking the broad trend were resources stocks, which contracted 0.4 percent after hitting their highest since June 2015 in the previous session.

Reporting by Jackie Cai and John Ruwitch; Editing by Eric Meijer

Our Standards:The Thomson Reuters Trust Principles.
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