China, HK stocks shrug off grim GDP data on hopes of recovery

China and Hong Kong stocks rose on Friday as investors looked past China's first quarterly economic contraction in at least 28 years, pinning their hopes on recovery as the impact of the coronavirus pandemic recedes. ** China's economy shrank for the first time since at least 1992 in the first quarter with the gross domestic product (GDP) falling 6.8% in the period, official data showed on Friday. ** "Investors are actually relieved as the shoe finally dropped," said Zhang Yanbing, an analyst with Zheshang Securities. "They are expecting a recovery in the second quarter as the social order is gradually restored in China." ** China's long-term growth potential will not be affected by the short-term impact of the coronavirus pandemic, a spokesman for the National Bureau of Statistics said on Friday.

** At the midday break, the Shanghai Composite index was up 0.89% at 2,845.03 points. ** China's blue-chip CSI300 index was up 1.23%, with its financial sector sub-index rising 0.93%, the consumer staples sector increasing 2.1%, the real estate index edging up 0.14% and the healthcare sub-index rising 0.27%. ** The smaller Shenzhen index was up 1.12% and the start-up board ChiNext Composite index was higher by 1.92%. ** Chinese H-shares listed in Hong Kong rose 2.08% to 9873.93 points, while the Hang Seng Index was up 2.31% at 2,4560.53. ** Hong Kong shares tracked regional gains as investors cheered new U.S. guidelines for ending that country's coronavirus shutdown. ** Around the region, MSCI's Asia ex-Japan stock index was firmer by 2.48% while Japan's Nikkei index was up 2.56%. ** So far this year, the Shanghai stock index is down 7.55%, while China's H-share index is down 13.4%. Shanghai stocks have risen 2.53% this month. ** The yuan was quoted at 7.0809 per U.S. dollar, 0.02% firmer than the previous close of 7.082.