February 18, 2019 / 4:44 AM / a year ago

China stocks jump on trade talk hopes, strong loan data

* SSEC +1.8 pct, CSI300 +2.1 pct, HSI +1.5 pct

* Energy firms rise on higher oil prices

* Yuan up on trade talk momentum, dollar weakness

SHANGHAI, Feb 18 (Reuters) - China stocks jumped on Monday after trade talks between the United States and Beijing saw progress ahead of a March 1 deadline, and new data showed Beijing’s attempts to boost investment led to record new loans in January. ** At the midday break, the Shanghai Composite index was up 1.79 percent at 2,730.27 points. ** China’s blue-chip CSI300 index was up 2.11 percent, with its financial sector sub-index higher by 2.01 percent. ** Chinese H-shares listed in Hong Kong rose 1.74 percent at 11,127.39, while the Hang Seng Index was up 1.51 percent at 28,322.74. ** U.S. President Donald trump said on Twitter that trade talks with China in Beijing had been “very productive”, following a briefing by his trade team. Chinese state media on the weekend said that the trade negotiations, which continue in Washington this week, were “making a final sprint” ahead of a March 1 deadline for a deal. ** A trade detente between the U.S. and China could help a post-Lunar New Year market bounce turn into a broader market recovery phase, analysts at Huatai Securities said in a note. They also listed improving liquidity, possible policy introductions at the upcoming annual meeting of China’s parliament and expanded MSCI index inclusion of Chinese A-shares as possibly market-boosting factors. ** China’s banks made the most new loans on record in January as policymakers try to jumpstart sluggish investment and prevent a sharper slowdown in the world’s second-largest economy. ** “Usually financial data leads economic data, so it can be hoped that financial data will also show stabilization. Once economic fundamentals improve at the margins, the market’s risk appetite may also gradually recover, and banks may be more willing to issue loans, which could in turn stimulate the economy in a virtuous cycle,” analysts at Huachuang Securities said in a note. ** “Of course, this process of improvement needs time, and in the short term, the market’s pessimistic expectations for the economy will not be turned around completely, but at least at present the economy is certainly not continuing to slide,” the analysts said. ** Rising oil prices supported Chinese energy firms, with the Hang Seng energy index rising 2.83 percent and the CSI energy index up 1.63 percent. OPEC-led supply cuts and U.S. sanctions on Iran and Venezuela lifted oil prices to three-month highs on Monday. ** The smaller Shenzhen index was up 2.41 percent and the start-up board ChiNext Composite index was higher by 2.59 percent. ** Around the region, MSCI’s Asia ex-Japan stock index was firmer by 0.85 percent while Japan’s Nikkei index was up 1.77 percent. ** The yuan was quoted at 6.7559 per U.S. dollar, 0.28 percent firmer than the previous close of 6.775. ** The largest percentage gainers in the main Shanghai Composite index were Aurora Optoelectronics Co Ltd, up 10.1 percent, followed by Anhui Quanchai Engine Co Ltd, gaining 10.06 percent and Triumph Science & Technology Co Ltd , up by 10.05 percent. ** The largest percentage losses in the Shanghai index were Harbin Churin Group Jointstock Co Ltd, down 4.41 percent, followed by Flower King Eco-Engineering Inc , losing 3.2 percent and Anhui Genuine New Materials Co Ltd, down by 2.65 percent. ** So far this year, the Shanghai stock index is up 7.56 percent, while China’s H-share index is up 8.0 percent. Shanghai stocks have risen 3.78 percent this month. ** The top gainers among H-shares were Huatai Securities Co Ltd , up 4.53 percent, followed by Anhui Conch Cement Co Ltd, gaining 4.48 percent and PetroChina Co Ltd , up by 4.22 percent. ** The biggest H-shares percentage decliner was Byd Co Ltd , down 2.88 percent. ** The top gainer on the Hang Seng was BOC Hong Kong Holdings Ltd, up 4.72 percent, while the biggest loser was Sino Biopharmaceutical Ltd, which was down 0.73 percent.

Reporting by Andrew Galbraith; Editing by Rashmi Aich

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