* Shanghai benchmark set to gain on-week
* Hubei province reports drop in new cases, deaths
* Track the coronavirus here: tmsnrt.rs/3aIRuz7
SHANGHAI/HONG KONG, Feb 14 (Reuters) - China stocks advanced on Friday, on course for their first weekly gain in four, as the daily death toll in Hubei - the epicentre of the coronavirus outbreak - halved and the number of new cases dropped. ** At the midday break, the Shanghai Composite index was up 0.5% at 2,921.25 points, while the blue-chip CSI300 index climbed 0.8%. The Shanghai index gained 1.6% so far this week, while the CSI300 index rose 2.4% for the week.
** CSI300’s financial sector sub-index traded higher by 1.3%, the consumer staples sector rose 0.7%, the real estate index gained 1.6% and the healthcare sub-index edged up 0.6%. ** Chinese H-shares listed in Hong Kong rose 0.6%, while the Hang Seng Index was up 0.6% at 27,895.49. ** The smaller Shenzhen index rose 0.8% and the start-up board ChiNext Composite index was higher by nearly 1%, after hitting a fresh three-year high in the morning session. ** Officials said on Friday the number of new coronavirus deaths and infections was down sharply from the previous day, when a change in the methods of diagnosing patients led to a record spike in cases. ** Shanxi Securities said in a note that the expectation of loosening monetary policy will continue to help equities, even as disruption to production hurts earnings. The brokerage tipped growth stocks to gain on the back of easier credit conditions. ** Foreign investors continued to buy into A-shares, with northbound flow into mainland stocks via the Stock Connect totalled more than 4 billion yuan by midday. ** Northbound inflow largely continued since onshore trading resumed on Feb 3, bringing year-to-date northbound net flows to $9.7 billion, as of Wednesday, Morgan Stanley said in note. ** The Chinese economy will grow at its slowest rate since the financial crisis in the current quarter, according to a Reuters poll of economists who said the downturn will be short-lived if the outbreak is contained. ** Around the region, MSCI’s Asia ex-Japan stock index firmed 0.4%, while Japan’s Nikkei index was down 0.5%. ** The yuan was 0.06% weaker at 6.9819 per U.S. dollar. ** So far this year, the Shanghai stock index is down 4.2%, while CSI300 index is down 2.7%. ** As of 0400 GMT, China’s A-shares were trading at a premium of 23.48% over the Hong Kong-listed H-shares. ** The Shanghai stock index is below 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 0.5% while the IT sector fell 0.1%.
Reporting by Luoyan Liu and Noah Sin, Editing by Sherry Jacob-Phillips