Hong Kong stocks set for worst week in over 3 months; China flat

Hong Kong stocks rose on Friday but were poised for their worst week in more than three months, on concerns over the persistent political unrest and uncertainty around Sino-U.S. trade deal.

** The Hang Seng index added 0.3%, to 26,408.86 points, while the Hong Kong China Enterprises Index gained 0.1%, to 10,437.09 points. ** Both indexes were on track for their steepest weekly losses since the week of Aug 2.

** The Hong Kong government condemned on Friday an attack by a "violent mob" on the city's justice secretary in London, the first direct altercation between demonstrators and a government minister during months of often violent protests. ** Hong Kong is expected to confirm on Friday it plunged into recession for the first time in a decade, amid concerns the economy could be in even worse shape than feared as months of anti-government protests take a heavy toll.

** The U.S. Congress should enact legislation that would suspend the special economic status Hong Kong enjoys under U.S. law should China deploy forces to crush protests in the territory, a congressional advisory body said on Thursday. ** The economy of Hong Kong has fallen into a technical recession, with the social unrest weighing markedly on Hong Kong's real estate, retail and hotel industries, GF Securities noted in the report.

** Considering the "lagged effect" of the social events, the deterioration of the fundamentals of those Hong Kong local companies is yet to end, the brokerage added. ** There have also been worries about the Sino-U.S. trade relations in absence of concrete details of a proposed trade deal.

** China and the United States are holding "in-depth" discussions on a first phase trade agreement, and canceling tariffs is an important condition to reaching a deal, the Chinese commerce ministry said on Thursday. ** The United States and China are getting close to a trade agreement, White House economic adviser Larry Kudlow said on Thursday, citing what he called very constructive talks with Beijing about ending a 16-month trade war.

** On the mainland, major indexes were flat but were also set for weekly losses. ** The CSI300 index was unchanged at 3,904.69 at the end of the morning session, while the Shanghai Composite Index was flat at 2,910.82.

** Both indexes were on track for biggest weekly losses since late Sept. ** The latest data showed China's factory output growth slowed significantly more than expected in October, as weakness in global and domestic demand and the drawn-out Sino-U.S. trade war weighed on broad segments of the world's second-largest economy.

** Around the region, MSCI's Asia ex-Japan stock index was firmer by 0.63% while Japan's Nikkei index was up 0.74%. ** The yuan was quoted at 7.0079 per U.S. dollar, 0.17% firmer than the previous close of 7.02.

** So far this year, the Shanghai stock index is up 16.68%, while China's H-share index is up 3.0%. Shanghai stocks have declined 0.66% this month. ** As of 04:02 GMT, China's A-shares were trading at a premium of 29.61% over the Hong Kong-listed H-shares.