* U.S., Chinese trade deputies face off in Washington amid deep differences
* China’s new one-year lending benchmark rate cut marginally
SHANGHAI, Sept 20(Reuters) - China stocks edged up on Friday after Beijing lowered a key lending rate to support a slowing economy hit by the protracted trade dispute with the United States.
** The CSI300 index rose 0.2%, to 3,933.47 points at the end of the morning session, while the Shanghai Composite Index gained 0.2%, to 3,004.48 points. However, both the indexes were set for weekly losses.
** China marginally cut its new one-year benchmark lending rate for the second month in a row on Friday, as the central bank seeks to guide borrowing costs lower amid the Sino-U.S. trade war.
** The largely-expected reduction in the one-year Loan Prime Rate (LPR), now at 4.20%, came after the People’s Bank of China (PBOC) lowered banks’ reserve requirements on Monday. It also comes shortly after the Federal Reserve cut U.S. interest rates by 25 basis points.
** Iris Pang, Greater China economist for ING in Hong Kong, said the move “is not a growth-stimulation story, it is more of a protection story, to not fall into a weaker growth range. Growth has been very weak and this is more for lowering interest costs for production and infrastructure.”
** The widely anticipated cut came after China maintained a key 1-year money market rate unchanged, indicating Beijing’s reluctance to flood the banking system with excessive liquidity.
** Investors also eyed Sino-U.S. trade talks, though analysts expect limited impact from it on the A-share market ahead of the 70th anniversary of the founding of China due to Beijing’s inclination to maintain stability in financial markets ahead of such significant events.
** Helping underpin the market were robust continued foreign funds, which marked their 16th session of net inflows into A-share market via the Stock Connect linking Hong Kong and the mainland, according to Refinitiv data.
** It’s natural for global investors to have proper exposure to equities in China as Beijing further opens up its financial markets, Yan Kaiwen, an analyst with China Fortune Securities said.
** In Hong Kong, stocks were flat after a four-day losing streak.
** The Hang Seng index was unchanged at 26,477.11 points, while the Hong Kong China Enterprises Index was unchanged at 10,383.34 points.
** Around the region, MSCI’s Asia ex-Japan stock index was firmer by 0.17% while Japan’s Nikkei index was up 0.34%.
** The yuan was quoted at 7.0868 per U.S. dollar, 0.14% firmer than the previous close of 7.097.
** As of 04:18 GMT, China’s A-shares were trading at a premium of 29.99% over the Hong Kong-listed H-shares.
Reporting by Luoyan Liu and John Ruwitch; Editing by Aditya Soni