November 25, 2019 / 8:39 AM / 7 months ago

HK stocks end firmer as markets cheer positive trade-deal signals

* HK->Shanghai Connect daily quota used 8.2%, Shanghai->HK daily quota used 1.9%

* HSI +1.5%, HSCE +1.2%, CSI300 +0.7%

* FTSE China A50 +1.0%

Nov 25 (Reuters) - Hong Kong stocks closed higher on Monday as investors cheered signs of headway in the trade negotiations between Washington and China, following upbeat comments from both countries.

** The Hang Seng index ended 1.5% firmer at 26,993.04, while the China Enterprises Index closed up 1.2% at 10,628.88.

** The leaders of the United States and China on Friday underscored their desire to sign an initial trade deal and defuse a 16-month tariff war that has lowered global growth, providing a welcome boost to financial markets.

** Investors welcomed signs that talks to resolve the trade row were moving to the next level when U.S. national security adviser Robert O’Brien said that an initial agreement is still possible by the end of the year, but warned Washington would not turn a blind eye to what happens in Hong Kong.

** The comments add to worries that a Chinese crackdown on anti-government protests in Hong Kong could further complicate the talks.

** China and the United States are “very close” to a ‘phase one’ trade deal, the Global Times, a tabloid run by the ruling Communist Party’s official People’s Daily, said on Monday, discounting “negative” media reports.

** Closer home, Hong Kong’s democrats scored a landslide majority in district council elections, which saw a record turnout after six months of anti-government protests, increasing pressure on the Chinese-ruled city’s leader on Monday to listen to calls for democracy.

** The elections, or at least their smooth holding, helped lift market sentiment, said Linus Yip, a Hong Kong-based analyst with First Shanghai Securities, adding positive comments over the weekend on the trade talks were also a boost.

** Liquidity conditions for the market would also improve as funds frozen for the subscription of Alibaba’s share sale will flow back, as the e-commerce giant is due to start trading on Tuesday in Hong Kong, he said.

** Around the region, MSCI’s Asia ex-Japan stock index was firmer by 0.69%, while Japan’s Nikkei index closed up 0.78%.

** The yuan was quoted at 7.0325 per U.S. dollar at 0811 GMT, 0.11% firmer than the previous close of 7.0405.

** About 1.50 billion Hang Seng index shares were traded, in line with the market’s 30-day moving average of 1.50 billion shares a day. The volume traded in the previous trading session was 1.10 billion.

** At close, China’s A-shares were trading at a premium of 27.89% over Hong Kong-listed H-shares. (Reporting by the Shanghai Newsroom, Editing by Sherry Jacob-Phillips)

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