China stocks extend gains; Hang Seng down

China shares rose on Thursday morning on hopes for policy support and as U.S. Federal Reserve Chairman Jerome Powell made comments interpreted as a dovish shift, but investors remain wary ahead of the upcoming G20 meeting in Argentina.

** At the midday break, the Shanghai Composite index was up 7.26 points, or 0.28 percent, at 2,608.99. ** China's blue-chip CSI300 index was up 0.31 percent, with its financial sector sub-index higher by 0.02 percent, the consumer staples sector up 0.7 percent, the real estate index down 0.77 percent and the healthcare sub-index up 0.99 percent. ** "Although the A-share market is showing strength, we should in no way view this as meaning that the short-term correction in prices is over," analysts at China Fortune Securities said in a note, highlighting the importance of a planned meeting this weekend between Chinese President Xi Jinping and U.S. President Donald Trump in Argentina. ** The analysts said the ongoing uncertainty in Sino-U.S. trade relations will mean the market will be mainly led by changes in risk appetite in the near future. "Typically in markets led by risk appetite, good or bad information can easily spark severe volatility," they said. ** U.S. Federal Reserve Chair Jerome Powell said on Wednesday the central bank's policy rate is now "just below" estimates of a level that neither brakes nor boosts a healthy U.S. economy - comments that many investors read as signaling the Fed's three-year tightening cycle is drawing to a close. ** Chinese H-shares listed in Hong Kong rose 0.18 percent at 10,653.47, but the Hang Seng Index edged down 0.13 percent at 26,646.76 after gaining 1.3 percent a day earlier. ** The smaller Shenzhen index was up 0.17 percent and the start-up board ChiNext Composite index was higher by 0.47 percent. ** Around the region, MSCI's Asia ex-Japan stock index was firmer by 0.85 percent while Japan's Nikkei index was up 0.62 percent. ** The yuan was quoted at 6.9424 per U.S. dollar, 0.17 percent firmer than the previous close of 6.954 as Powell's comments prompted dollar weakness. ** The largest percentage gainers in the main Shanghai Composite index were Suzhou Kelida Building & Decoration Co Ltd , up 10.05 percent, followed by Shanghai Kindly Enterprise Development Group Co Ltd, gaining 10.05 percent and Shaanxi Broadcast & TV Network Intermediary Group Co Ltd, up by 10.05 percent. ** The biggest percentage losers in the Shanghai index were Shanghai Xinhua Media Co Ltd, down 8.33 percent, followed by Shanghai DaZhong Public Utilities Group Co Ltd , losing 4.86 percent and Ginwa Enterprise Group Inc , down by 4.64 percent. ** So far this year, the Shanghai stock index is down 21.33 percent, while China's H-share index is down 9.2 percent. Shanghai stocks have declined 0.04 percent this month. ** The top gainers among H-shares were GF Securities Co Ltd , up 3.63 percent, followed by Guangzhou Automobile Group Co Ltd, gaining 2.71 percent and Byd Co Ltd , up by 2.3 percent. ** The three biggest H-shares percentage decliners were CSPC Pharmaceutical Group Ltd, which has fallen 1.59 percent, China Petroleum & Chemical Corp, which has lost 1.1 percent and China Railway Group Ltd, down by 0.8 percent. ** In Hong Kong, the sub-index of the Hang Seng index tracking energy shares dipped 0.2 percent while the IT sector fell 0.3 percent. The top gainer on the Hang Seng was Henderson Land Development Co Ltd, up 2.29 percent, while the biggest loser was Galaxy Entertainment Group Ltd , which was down 2.18 percent.

(Reporting by Andrew Galbraith; Editing by Gopakumar Warrier)

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