May 18, 2020 / 4:36 AM / 19 days ago

China stocks gain as rising home prices highlight gradual recovery

* Shanghai Composite index +0.61%; CSI300 +0.65%; HSI +0.4%

* Real estate sub-index jumps 1.7% after April home price data

* Tech shares down on U.S. move to cut off Huawei from suppliers

* China commerce minister highlights trade challenges

SHANGHAI, May 18 (Reuters) - China shares rose on Monday, helped by an improved risk appetite as new data indicated a gradual recovery in the country’s property market, but the threat of a second wave of virus infections and fresh trade concerns limited gains.

** At the midday break, the Shanghai Composite index was up 0.61% at 2,885.83 points. ** China’s blue-chip CSI300 index was up 0.65%, with the financial sector sub-index higher by 0.4%, consumer staples sector up 1.91%, real estate index up 1.7% and healthcare sub-index up 2.33%. ** The property sector was boosted by new data showing China’s new home prices rose at a slightly faster pace in April, adding to signs of gradual recovery in the property market. ** Chinese H-shares listed in Hong Kong rose 0.36% to 9,709.58, while the Hang Seng index was up 0.4% at 23,892.24. ** Risk sentiment has also been helped by expectations of policy support. In an article published Saturday, China’s central bank governor said the country will strengthen monetary policy support for the economy as authorities fight the hit from the pandemic. ** Improved risk appetite put pressure on Chinese government bonds, driving benchmark 10-year treasury futures lower. The most-traded contract, for September delivery, fell 0.57%. ** However, highlighting continued difficulties for the economy, global demand has slumped significantly due to the virus outbreak and trade faces “unprecedented challenges”, China’s commerce minister said on Monday. ** Tech shares slumped 1.78% after the Trump administration on Friday moved to block global chip supplies to Huawei Technologies, prompting China’s commerce ministry to pledge it will take all necessary measures to safeguard Chinese firms’ rights and interests. ** China reported seven new confirmed coronavirus cases for May 17, up from five a day earlier, the country’s health authority said on Monday. That number included the first locally transmitted case in Shanghai since late March. ** The northeastern province of Jilin, currently in a partial lockdown due to a flare-up in infections, reported two confirmed cases. ** The smaller Shenzhen index was up 0.25% and the start-up board ChiNext Composite index was higher by 0.44%. ** Around the region, MSCI’s Asia ex-Japan stock index was firmer by 0.29%, while Japan’s Nikkei index was up 0.47%. ** The yuan was quoted at 7.108 per U.S. dollar, 0.1% weaker than the previous close of 7.1012. ** So far this year, the Shanghai stock index is down 5.96%, while China’s H-share index is down 13.4%. Shanghai stocks have risen 0.29% this month. (Reporting by Andrew Galbraith; Editing by Shounak Dasgupta)

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