February 18, 2016 / 8:07 AM / 5 months ago

Hong Kong stocks post best week since June on bill withdrawal, trade optimism

* HK->Shanghai Connect daily quota used 11.2%, Shanghai->HK daily quota used 3.4%

* HSI +0.7%, HSCE +0.5%, CSI300 +0.6%

* FTSE China A50 +0.8%

Sept 6 (Reuters) - Hong Kong stocks closed higher on Friday, posting their best week since June after the withdrawal of a controversial extradition bill and on hopes of a de-escalation in the protracted Sino-U.S. trade dispute.

** The Hang Seng index rose 0.7% to 26,690.76, while the China Enterprises Index gained 0.5% to 10,430.67.

** For the week, HSI gained 3.8% while HSCE added 3.5%, their biggest weekly gains since late June.

** Hong Kong leader Carrie Lam said on Friday measures announced this week to help restore order in the Chinese-ruled city are a first step, and disagreed with a credit downgrade by rating agency Fitch.

** Lam on Wednesday withdrew a controversial extradition bill that triggered months of often violent protests and announced three other measures to help ease the crisis.

** For the day, market reaction to Fitch’s downgrade of Hong Kong to ‘AA’ from ‘AA+’ was muted.

** Cooling trade tensions between China and the United States also helped boosted sentiment during the week.

** China and the United States on Thursday agreed to hold high-level talks in early October in Washington, cheering investors hoping for a trade war thaw as new U.S. tariffs on Chinese consumer goods chip away at global growth.

** Around the region, MSCI’s Asia ex-Japan stock index was firmer by 0.61%, while Japan’s Nikkei index closed up 0.54%.

** The yuan was quoted at 7.122 per U.S. dollar at 08:21 GMT, 0.39% firmer than the previous close of 7.1499.

** The top gainers among H-shares were China Huarong Asset Management Co Ltd up 4.1%, followed by Guangzhou Automobile Group Co Ltd rising 3.98% and Shenzhou International Group Holdings Ltd gaining 3.12%.

** The three biggest H-shares percentage decliners were China Gas Holdings Ltd, down 6.65%, CSPC Pharmaceutical Group Ltd, which fell 2.21% and China Resources Beer Holdings Co Ltd, down 1.37%.

** At close, China’s A-shares were trading at a premium of 28.36% over Hong Kong-listed H-shares. (Reporting by the Shanghai Newsroom; Editing by Sriraj Kalluvila)

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