January 31, 2019 / 5:08 AM / 6 months ago

China stocks climb on new tech board; dovish Fed lifts HK

* .SSEC +0.6 pct, .CSI300 +1 pct; .HSI up at 4-month high

* China outlines rules for technology board

* Fed pause lifts interest-rate sensitive HK market

HONG KONG, Jan 31 (Reuters) - China stocks rose on Thursday ahead of a Nasdaq-style start-up board launch in Shanghai, while Hong Kong stocks climbed on the back of a dovish stance by the U.S. Federal Reserve. ** At the midday break, the Shanghai Composite index was up 0.6 percent at 2,591.84 points. ** China’s blue-chip CSI300 index gained 1 percent, with its financial sector sub-index rising 1.8 percent and the healthcare sub-index up 0.3 percent. ** A CSI sub-index tracking securities companies climbed 1.5 percent. The jump came after the China Securities Regulatory Commission published draft rules for a board in Shanghai on Wednesday evening. The so-called technology innovation board will mainly host companies in technology and emerging sectors, such as high-tech equipment manufacturing, new energy, biotechnology, big data and cloud computing, the regulator said. ** The smaller Shenzhen index rose as much as 0.1 percent and the start-up board ChiNext Composite index climbed 0.3 percent. ** Chinese factory activity contracted for a second straight month in January, data showed on Thursday, pointing to further strains on the economy that could heighten risks to global growth. ** However, that is a slight improvement from December and shows that “the slowdown in China’s manufacturing sector is still manageable”, Betty Wang, senior economist at ANZ wrote in a note on Thursday. ** Meanwhile, official data on Thursday showed that growth in China’s services industry picked up for a second straight month in January, reflecting some pockets of strength in an economy that is cooling under pressure from weak demand at home and abroad. ** In Hong Kong, Chinese H-shares rose 1.5 percent, while the Hang Seng Index was up 1.2 percent at 27,977.33 points, its highest level since September 26, 2018. ** The index’s rise came after the Fed held from hiking interest rate on Thursday, and signalled its three-year-drive to tighten monetary policy, amid a suddenly cloudy outlook for the U.S. economy due to global headwinds and impasses over trade and government budget negotiations. ** Around the region, MSCI’s Asia ex-Japan stock index was firmer by 0.9 percent, while Japan’s Nikkei index was up 1.2 percent. ** The largest percentage gainers in the main Shanghai Composite index were Shanghai Shenhua Holdings Co Ltd, which rose as much as 9.4 percent, followed by Poten Environment Group Co Ltd, which gained 7.4 percent and Chongqing Chuanyi Automation Co Ltd, which climbed 7.3 percent. ** As of midday, China’s A-shares were trading at a premium of 16.89 percent over the Hong Kong-listed H-shares. ** The Shanghai stock index is above its 50-day moving average and below its 200-day moving average. ** In Hong Kong, the sub-index of the Hang Seng index tracking energy shares rose 1 percent while the IT sector rose 1.5 percent.

Reporting by Noah Sin, Editing by Sherry Jacob-Phillips

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