March 13, 2017 / 4:59 AM / a year ago

China, HK stocks up as Beijing official says economy steadier

* SSEC 0.4 pct, CSI300 0.6 pct, HSI 0.9 pct

* Fed rate hike this week fully baked in

* gov officials say risk of steep slide in China economy reduced

SHANGHAI, March 13 (Reuters) - China and Hong Kong stocks rebounded on Monday as the markets, having priced in an almost certain U.S. rate hike this week, gave a positive response to official comments over the weekend suggesting China’s economy was on a steadier footing.

China’s blue-chip CSI300 index rose 0.6 percent, to 3,449.57 points by the lunch break, while the Shanghai Composite Index gained 0.4 percent, to 3,226.41 points.

In Hong Kong, the Hang Seng index rose 0.9 percent to 23,779.54 points, while the Hong Kong China Enterprises Index gained 1.5 percent to 10,219.80.

Investor sentiment was boosted by comments on Sunday from Li Wei, director of the Development Research Centre of the State Council, who said that the risk of a steep slide in China’s economy has reduced. He said the economy had moved through an “L-shaped” pattern of slowing to now “horizontal” growth.

Fears of aggressive monetary tightening also abated after a senior government official said on Sunday that the debt risk for China’s main state-owned enterprises (SOEs) is controllable. On Friday, China’s central bank governor Zhou Xiaochuan said that it would take time to bring down corporate debt levels.

Sealand Securities said in its latest strategy report that although another U.S. rate hike would have short-term impact on the yuan and domestic liquidity, the “marginal” impact was bcoming smaller and smaller, limiting the risk of a further slide in stocks.

All main sectors rose in China and Hong Kong.

China’s tech-heavy start-up board ChiNext rose over 1 percent, outperforming the broader market, after Wan Gang, head of China’s Ministry of Science & Technology said over the weekend that China will soon publish a blueprint to promote development of Artificial Intelligence (AI).

Material stocks jumped around 1 percent in both China and Hong Kong markets on expectations that prices of raw materials will rise further on the back of a recovery in the global economy.

Samuel Shen and John Ruwitch; Editing by Simon Cameron-Moore

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