March 26, 2019 / 8:49 AM / 3 months ago

Hong Kong shares recover but US recession fears weigh

* Hang Seng index ends up 0.15 pct

* China Enterprises index HSCE ends steady

* HSI financial sector sub-index flat; property sector up 0.4 pct

March 26 (Reuters) - Hong Kong shares steadied on Tuesday after the previous session’s heavy losses, but investor sentiment remained fragile as concerns over a possible U.S. recession lingered, and China and the United States readied for the next round of trade talks.

** At the close of trade, the Hang Seng index was up 0.15 percent at 28,566.91 points. The Hang Seng China Enterprises index was steady at 11,231.73. ** The sub-index of the Hang Seng tracking energy shares rose 0.8 percent, while the IT sector dipped 0.4 percent, the financial sector ended 0.09 percent higher and the property sector rose 0.42 percent. ** As global growth slows, Eric Rosengren, president of the Federal Reserve Bank of Boston, said Tuesday that the U.S. Federal Reserve should consider raising the proportion of short-term Treasury bonds it holds to give itself more options to respond to economic pullbacks. ** Investors have been spooked by sharp falls in U.S. bond yields and an inversion of the U.S. Treasury yield curve, which is widely seen as an indicator of an economic recession. On Tuesday afternoon, the 10-year U.S. Treasury yield edged up to 2.4318 percent, having fallen as low as 2.3770 percent on Monday. ** Investors are also looking ahead to the next round of trade talks as a U.S. trade delegation visits China March 28-29. Trade tensions between the United States and China have caused huge amounts of economic uncertainty and could cut Asia’s economic growth by 0.5 percentage point, a senior International Monetary Fund official said on Tuesday. ** The top gainer on the Hang Seng was Shenzhou International Group Holdings Ltd, which gained 3.37 percent, while the biggest loser was AAC Technologies Holdings Inc, which fell 2.98 percent. ** China’s main Shanghai Composite index closed down 1.51 percent at 2,997.10 points, while the blue-chip CSI300 index ended down 1.13 percent. ** A-shares have come under pressure amid heavy selling by foreign investors. Analysts at China Fortune Securities said in a note that outflows from northbound investors hit 10.7 billion yuan ($1.59 billion) on Monday, the second-highest level on record. ** Around the region, MSCI’s Asia ex-Japan stock index was firmer by 0.24 percent, while Japan’s Nikkei index closed up 2.15 percent. ** The yuan was quoted at 6.7116 per U.S. dollar at 08:24 GMT, 0.04 percent weaker than the previous close of 6.709. ** The top gainers among H-shares were Shenzhou International Group Holdings Ltd up 3.37 percent, followed by China Pacific Insurance Group Co Ltd, gaining 2.81 percent, and CNOOC Ltd, up by 2.22 percent. ** The three biggest H-shares percentage decliners were SINOPHARM GROUP CO LTD, which was down 3.64 percent, China Vanke Co Ltd, which fell 3.0 percent, and Haitong Securities Co Ltd, down by 2.0 percent.

$1 = 6.7117 Chinese yuan Reporting by Andrew Galbraith; Editing by Subhranshu Sahu

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