China stocks rise on upbeat factory activity data, trade deal hopes

Chinese shares rose on Friday to finish the week higher on stronger-than-expected factory activity data and growing optimism around a potential trade deal between the United States and China. ** At the close, the Shanghai Composite index was up 1% at 2,958.20, up 0.1% from the previous week. The blue-chip CSI300 index rose 1.7%, up 1.4% week-on-week. ** CSI300's financial sector sub-index rose 1.9%, the consumer staples sector was up 0.4%, the real estate index gained 2% and the healthcare sub-index was up 1.7%. ** The smaller Shenzhen index ended up 1.3% and the start-up board ChiNext Composite index was higher by 0.9%. ** U.S. President Donald Trump said on Thursday the United States and China would soon announce a new site where he and Chinese President Xi Jinping will sign a "Phase One" trade deal after Chile canceled a planned summit set for mid-November. ** China's commerce ministry said in a statement on Thursday that bilateral talks will continue to proceed as previously planned and the lead trade negotiators from both countries will speak by telephone on Friday. ** Factory activity in China expanded at its fastest pace in more than two years in October as export orders and production rose, a private business survey showed on Friday. The expansion beat expectations and contrasted with the dour results of an official survey on Thursday. ** "The only sector that experienced a correction today was the agricultural one," Gerry Alfonso, an analyst at brokerage Shenwan Hongyuan, wrote in a note. "The performance of the agricultural sector is likely an indication that the market considers the preliminary trade deal between China and the US as a down deal." ** The CSI's agriculture sub-index was off 0.3%. ** Around the region, MSCI's Asia ex-Japan stock index was firmer by 0.4%, while Japan's Nikkei index closed down 0.3%. ** The largest percentage gainers in the main Shanghai Composite index were Shanghai Fenghwa Group Co Ltd, up 10.1%, followed by Zhejiang Medicine Co Ltd and Easy Visible Supply Chain Management Co Ltd, both up 10%. ** So far this year, the Shanghai stock index is up 18.6% and the CSI300 has risen 31.3%. ** About 15.99 billion shares were traded on the Shanghai exchange. The volume in the previous trading session was 16.16 billion. ** The Shanghai stock index is above its 50-day moving average and above its 200-day moving average.

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