March 2, 2020 / 4:37 AM / a month ago

China, Hong Kong stocks rebound as dismal data fuels stimulus hopes

* SSEC +2.9, CSI300 +3.2%, HSI +0.9%, HSCE +1.9%

* China Feb factory activity shrinks fastest ever

* Market expects stimulus; infrastructure stocks rally

SHANGHAI/HONG KONG, March 2 (Reuters) - China and Hong Kong stocks rebounded on Monday, led by infrastructure and real estate stocks, as bleak economic data fuelled hopes Beijing will roll out further stimulus to support the world’s second-largest economy, and as new virus cases declined. ** At the midday break, the Shanghai Composite index was up 2.9% at 2,965.11 points. The blue-chip CSI300 index rose 3.2%.

** CSI300’s financial sector sub-index gained 3%, the consumer staples sector rose 3.1%, the real estate index rallied almost 5% and the healthcare sub-index was up 2.2%. ** Chinese H-shares listed in Hong Kong rose 1.9%, while the Hang Seng Index was up 0.9% at 26,365.04. ** The smaller Shenzhen index jumped 3.4% and the start-up board ChiNext Composite index gained 2.9%. ** Factory activity in China contracted at the fastest pace ever in February, even worse than during the global financial crisis, highlighting the colossal damage from the coronavirus outbreak on the economy. ** China’s official Purchasing Managers’ Index (PMI) fell to a record low of 35.7 in February from 50.0 in January, the National Bureau of Statistics said on Saturday, well below the 50-point mark that separates monthly growth from contraction. ** On Monday, a private survey showed China’s factories were dealt a devastating blow in February as the coronavirus epidemic triggered the sharpest contraction in activity on record, with the health crisis paralysing large parts of the economy. ** The SSE industrials sector and SSE properties subindex both jumped more than 5%. ** Infrastructure stocks, which have an advantage in terms of low valuations and absolute prices, rallied as investors expected Beijing to step up policy support, said Wang Mingli, executive director of Youpu Investment, a Shanghai-based private equity fund. ** China’s central Hubei province, the epicentre of the country’s coronavirus outbreak, reported less than 200 cases of new infections for the first time since January.

** Around the region, MSCI’s Asia ex-Japan stock index was firmer by 1.2% while Japan’s Nikkei index was up 1.7%. ** The yuan was 0.35% stronger at 6.9665 per U.S. dollar as of 0353 GMT. The Hong Kong Dollar firmed 0.12% to 7.7833 per U.S. dollar. ** So far this year, the Shanghai stock index is down 2.8%, while CSI300 index is down 0.8%. ** The Shanghai stock index is below its 50-day moving average and above its 200-day moving average.

Reporting by Luoyan Liu and Noah Sin; Editing by Sriraj Kalluvila

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