* SSEC +0.2%, CSI300 flat, HSI +0.4%, HSCE +0.3%
* Factory output rises for first time in 2020, consumption still weak
* Parliament annual meeting set for next week, policy support eyed
HONG KONG, May 15 (Reuters) - Chinese stocks edged up on Friday after factory output rose for the first time this year as coronavirus lockdowns were slowly lifted, easing growth concerns and offsetting caution around an escalation in U.S.-China tensions.
** At the midday break, the Shanghai Composite index was 0.2% higher at 2,875.45 points. ** China’s blue-chip CSI300 index was flat, with its financial sector sub-index higher by 0.3%, the consumer staples sector down 0.7%, the real estate index up 0.3% and the healthcare sub-index down 1.2%. ** Chinese H-shares listed in Hong Kong rose 0.3%, while the Hang Seng Index ticked up 0.4% to 23,925.40. ** The smaller Shenzhen index climbed 0.6% and the start-up board ChiNext Composite index was 0.7% higher.
** China’s industrial output rose 3.9% in April from a year earlier, data showed, compared with an expected 1.5% increase according to analysts polled by Reuters. However, consumption remained weak, with retail sales falling 7.5%.
** China’s central bank unexpectedly kept the interest rate on its medium-term funding for financial institutions steady on Friday. Authorities have stepped up the pace of monetary easing recently to combat the economic slowdown.
** The Chinese parliament’s annual meeting is set to start on May 22, after a delay due to the coronavirus outbreak.
** “We expect policy makers to release more details of economic stimulus measures, particularly on the fiscal side,” analysts at Morgan Stanley said in a note.
** “Historically A-shares have tended to react more positively to macro policy announcements, while A-shares’ resilience against FX volatility and low foreign ownership also help as uncertainty unfolds on the trade tension front,” the analysts added.
** U.S. President Donald Trump said he has no interest in speaking to Chinese President Xi Jinping right now and suggested he could even cut ties with the world’s second largest economy, as the pandemic had cast a pall over his January trade deal with Beijing
** Around the region, MSCI’s Asia ex-Japan stock index was firmer by 0.4%, while Japan’s Nikkei index was 0.3% higher. ** The yuan was 0.1% weaker at 7.1010 per U.S. dollar at 0416 GMT. ** So far this year, the Shanghai stock index has lost 5.7%, while China’s H-share index has declined 13%. Shanghai stocks have risen 0.5% this month, but lost 0.7% so far this week.
Reporting by Noah Sin; Editing by Devika Syamnath