* Hang Seng up 1.1%, H-shares add 1%
* Hong Kong to relax some restrictions as new infections dwindle
* Market awaits cues as China market to re-open on Wed - analyst
HONG KONG, May 5 (Reuters) - Hong Kong shares closed higher on Tuesday after the Asian financial hub scaled back social distancing measures put in place to curb the spread of the pandemic, and as economies elsewhere also showed signs of re-opening businesses.
** The Hang Seng index closed up 1.1% at 23,868.66. The Hang Seng China Enterprises index rose 1%. ** The sub-index of the Hang Seng tracking energy shares added 1.8%, the IT sector rose 1.3%, the financial sector ended 0.6% higher and the property sector closed up 0.9%.
** The Hong Kong government said on Tuesday it will relax restrictions on public gatherings and allow gyms, cinemas and beauty parlours to re-open later this week. ** The Chinese-ruled city has not reported any local transmissions for more than two weeks and recorded zero cases for seven of the past 10 days.
** Mainland China’s financial markets are closed until Wednesday for a public holiday. ** With China closed, Hong Kong stocks followed Asian markets higher in early trade on signs that economies across the world were gradually resuming economic activity. MSCI’s Asia ex-Japan stock index was firmer by 0.9%. ** “The fall was fast yesterday ... everybody saw Hong Kong market as an ATM (withdrawal of funds) with the A-share market shut. We are steadying a bit after that,” said Linus Yip, chief strategist at First Shanghai Securities in Hong Kong. “We will need to see how far A-shares fall tomorrow.”
** About 1.33 billion Hang Seng index shares were traded on Tuesday, the lowest in over a week, compared with 2.56 billion shares in the previous session.
** Hong Kong suffered its deepest economic contraction on record in the first quarter, with the worst drop since at least 1974, as the virus dealt a heavy blow to business activity, already in decline following months of anti-government protest last year. ** Interbank interest rates in Hong Kong fell across the curve, indicating a rising availability of cash in the city following recent central bank interventions.
Reporting by Noah Sin, Editing by Sherry Jacob-Phillips