April 7, 2017 / 5:03 AM / a year ago

Hong Kong stocks fall after U.S. attack on Syria; China ticks up

* SSEC +0.2 pct, CSI300 +0.1 pct, HSI -0.6 pct

* Safe haven assets rise after Trump orders air attack on Syria

SHANGHAI, April 7 (Reuters) - Hong Kong stocks hit a three-week low on Friday morning, as investors shifted to safe haven assets such as gold and bonds after the United States fired cruise missiles at an air base in Syria.

China stocks, not impacted by the news on Syria, edged higher. Strength in defence shares and energy majors offset weakness in construction plays due to profit-taking after the sector’s two-day rally.

In Hong Kong, where the market is more exposed to global volatility, the benchmark Hang Seng index was down 0.6 percent at midday, to 24,137.11, while the Hong Kong China Enterprises Index lost 0.4 percent, to 10,233.85.

For the week, the Hang Seng was up 0.1 percent.

Sentiment in Hong Kong was already soft as investors awaited results of U.S. President Donald Trump’s talks with his Chinese counterpart Xi Jinping, expected to cover North Korea and China’s big trade surplus with the United States.

Linus Yip, strategist at First Shanghai Securities Ltd, said the missile attack on Syria was the main reason for Friday’s fall in Hong Kong.

“But there’s no need to panic, what will come out of Trump and Xi’s meeting is more important.”

Yip said sentiment would be lifted if Trump softens his initial tough attitude with China in the meeting.

Price of gold and domestic bonds rose as investors sought safety.

Oil firms advanced on higher oil prices, bucking the broad trend. An index tracking energy majors gained 1.6 percent at midday.

In China, the blue-chip CSI300 index rose 0.1 percent, to 3,518.85, while the Shanghai Composite Index gained 0.2 percent, to 3,289.09.

The Shanghai index has gained 2.1 percent so far this week.

Mainland markets were mixed. Construction stocks contracted 0.4 percent after hitting a 16-month high on Thursday. The sub-index had rallied 6.2 percent in the past two sessions on news that China would launch a new economic zone.

Energy and defence sub-indexes were up more than 1 percent at the lunch break.

Reporting by Jackie Cai and John Ruwitch; Editing by Richard Borsuk

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