March 1, 2019 / 4:35 AM / 7 months ago

China stocks climb on MSCI decision; Hong Kong gains

* SSEC 0.1 pct, CSI300 0.5 pct, HSI 0.5 pct

* MSCI to quadruple weighting of China A-shares in its global benchmarks

* China’s manufacturing activity shrinks again in Feb but at slower pace

SHANGHAI, March 1 (Reuters) - China stocks rose on Friday after index publisher MSCI said it would boost the proportion of Chinese mainland shares in its global benchmarks, though soft factory activity data curbed further gains.

** The CSI300 index was up 0.5 percent at 3,685.73 points at the end of the morning session, while the Shanghai Composite Index gained 0.1 percent to 2,945.05 points.

** Global index provider MSCI is quadrupling the weightage of Chinese mainland shares in its global benchmarks later this year, a move it said might draw more than $80 billion of fresh foreign inflows to the world’s second-biggest economy.

** “We estimate these changes would lead to a $67 billion fund inflow to the A-share market this year,” Gao Ting, Head of China Strategy at UBS Securities, noted in report.

** Foreign investors as a group have surpassed insurers as the largest A-share holder, and with the help of the MSCI weight increase, are likely to rival domestic mutual funds soon, Gao added.

** However, major indexes pared gains after rising more than 1 percent, amid worries over the health of the world’s second-largest economy.

** China’s factory activity contracted for a third straight month in February but at a slower pace, helped by improvements in domestic manufacturing, a private survey showed on Friday.

** The readings - closely watched by investors as an alternative to the official data and more focused on smaller firms - offered further evidence China’s economy is losing momentum and suggests the U.S.-Sino trade war will continue to weigh on exports as prospects for a trade deal remain uncertain.

** China’s leaders will pledge in parliament next week to keep the country on safe footing as the economy faces its biggest test in years, amid pressure to roll out more measures to bolster growth and revive weak business and consumer confidence.

** In Hong Kong, the Hang Seng index added 0.5 percent to 28,760.83 points, while the Hong Kong China Enterprises Index gained 0.9 percent to 11,469.04 points.

** Around the region, MSCI’s Asia ex-Japan stock index climbed 0.27 percent, while Japan’s Nikkei index rose 1.13 percent.

** The yuan was quoted at 6.698 per U.S. dollar, 0.07 percent weaker than the previous close of 6.6935.

** The largest percentage gainers in the main Shanghai Composite index were Greattown Holdings Ltd, which rose as much as 10.09 percent, followed by Hualing Xingma Automobile Group Co Ltd, which gained up to 10.07 percent and Shanghai Feilo Acoustics Co Ltd, which climbed 10.03 percent.

** The largest percentage losses in the Shanghai index were Ningxia Jiaze Renewables Corp Ltd, which lost 6.91 percent, followed by Universal Scientific Industrial Shanghai Co Ltd, which fell as much as 6.54 percent and Hua Yuan Property Co Ltd, which slipped 6.13 percent.

** So far this year, the Shanghai stock index is up 17.93 percent, while China’s H-share index is up 12.3 percent. Shanghai stocks have risen 13.79 percent this month.

** The top gainers among H-shares were PICC Property and Casualty Co Ltd, up 4.47 percent, followed by GF Securities Co Ltd, gaining 4.23 percent and Shenzhou International Group Holdings Ltd, up by 3.67 percent.

** The three biggest H-shares percentage decliners were CSPC Pharmaceutical Group Ltd, which has fallen 1.34 percent, Air China Ltd, which has lost 1.2 percent and Industrial and Commercial Bank of China Ltd, down by 0.7 percent.

** About 20.83 billion shares have traded so far on the Shanghai exchange, roughly 93.0 percent of the market’s 30-day moving average of 22.39 billion shares a day. The volume traded was 35.02 billion as of the last full trading day.

** As of 0417 GMT, China’s A-shares were trading at a premium of 22.71 percent over the Hong Kong-listed H-shares.

Reporting by Luoyan Liu and John Ruwitch, Editing by Sherry Jacob-Phillips

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