Chinese stocks boosted by increased Huawei hopes

China stocks rose on Tuesday as the easing of U.S. trade restrictions on Chinese telecoms firm Huawei brought relief to investors, lifting sentiment battered by a bruising trade war between the world's two largest economies.

At the midday break, the Shanghai Composite index was up 1.52% at 2,914.22 points. China's blue-chip CSI300 index rose 1.8%. Chinese H-shares listed in Hong Kong edged up 0.57% to 10,693.6, while the Hang Seng Index rose 0.22% to 27,848.79.

Tuesday's gains follow the U.S. government temporarily easing trade restrictions imposed last week on China's Huawei Technologies Co Ltd, a move aimed at minimising disruption for its customers. While marking a temporary reprieve, Huawei's founder, Ren Zhengfei, dismissed it and said that the tech firm had prepared for U.S. action.

The easing of restrictions and Ren's comments boosted Huawei suppliers in Hong Kong and mainland China. A CSI sub-index tracking information technology companies gained 2.68%, and the info-tech sector in Hong Kong added 1.18%. The CSI financial sector sub-index climbed 1.54%, the consumer staples sector rose 1.69%, the real estate index gained 1.55% and the healthcare sub-index jumped 1.82%.

Companies in the rare-earths sector surged amid speculation that the materials might be used as countermeasures in the Sino-U.S. trade spat, after Chinese President Xi Jinping visited Jl Mag Rare-Earth Co Ltd, a producer in southern China, on Monday. Jl Mag Rare-Earth jumped by the daily 10% limit on Monday and Tuesday, leading gains across the sector. The smaller Shenzhen index was up 1.92% and the start-up board ChiNext Composite index was higher by 2.04%.

Around the region, MSCI's Asia ex-Japan stock index was firmer by 0.35%, while Japan's Nikkei index dipped 0.08%. The yuan was quoted at 6.9028 per U.S. dollar, 0.15% firmer than the previous close of 6.9133. The largest percentage gainers in the main Shanghai Composite index were Zhongmin Energy Co Ltd, up 10.07%, followed by Ningbo Boway Alloy Material Co Ltd, gaining 10.06% and Shanghai DZH Ltd, up by 10.06%.

The largest percentage losses in the Shanghai index were Elion Energy Co Ltd, down 10%, followed by Beken Corp, losing 7.25% and Harbin High-Tech Group Co Ltd, down by 7.25%. So far this year, the Shanghai stock index is up 15.11%, while China's H-share index climbed 5%. Shanghai stocks have declined 6.75% this month.

The top gainers among H-shares were China National Building Material Co Ltd, up 3.09%, followed by China Huarong Asset Management Co Ltd, gaining 2.94% and New China Life Insurance Co Ltd, up by 2.93%.

The three biggest H-shares percentage decliners were China Railway Group Ltd, which dropped 1.69%, China Telecom Corp Ltd, which lost 1.3% and China Vanke Co Ltd, which slipped 1.2%. The top gainer on the Hang Seng was AAC Technologies Holdings Inc, up 3.01%, while the biggest loser was Techtronic Industries Co Ltd, which was down 2.19%.