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China and Hong Kong stocks climb as new coronavirus cases fall


China and Hong Kong stocks climb as new coronavirus cases fall
Image Credit: StoryBlocks

China stocks were on pace for their sixth straight session of gains on Tuesday, as sentiment was helped by a slowdown in new coronavirus cases. At the midday break, the Shanghai Composite index was up 0.3% at 2,900.14 points. The blue-chip CSI300 index rose 0.8%. Both indexes rose in the previous five sessions.

CSI30's financial sector sub-index rose almost 1%, the consumer staples sector climbed 1.5%, the real estate index was up 1.6%, while healthcare shares fell 0.2%. Chinese H-shares listed in Hong Kong rose 1.6% and the Hang Seng Index was up 1.3% at 27,583.02. The smaller Shenzhen index fell 0.1% and the start-up board ChiNext Composite index was weaker by 0.7%.

There were 2,478 new confirmed cases in mainland China on Feb. 10, down from 3,062 on the previous day, bringing the total to 42,638. It was the second time in the past two weeks that authorities recorded a daily drop in new cases. Investors became more confident as the number of newly confirmed cases outside epicenter Hubei province dropped, said Zhang Yanbing, an analyst with Zheshang Securities, who added that the valuation of stocks were cheap after last week's fall.

China's central bank should consider lowering its benchmark deposit rate to enable banks to reduce lending rates and help small businesses weather the economic fallout from the fast-spreading coronavirus, a central bank advisor said. Nomura analysts said in a note they will "track for signs of any news fatigue emerging in the financial media... an important variable which drives investor sentiment".

Nomura downgraded Asian equities this week amid the epidemic's economic impact but said support from central banks will likely provide tailwind for stocks later this year. Investors will also be keeping an eye on remarks by U.S. Federal Reserve Chairman Jerome Powell at a Congress testimony later on Tuesday. Around the region, MSCI's Asia ex-Japan stock index was firmer by nearly 1%, while Japan's Nikkei index lost 0.6%.

The onshore yuan was quoted 0.13% stronger at 6.9783 per U.S. dollar. The largest percentage gainers in the main Shanghai Composite index were Changzhou Tenglong Auto Parts Co Ltd, Hangzhou Freely Communication Co Ltd and Luoyang Glass Co Ltd, all rose about 10%. As of midday, China's A-shares were trading at a premium of 23.49% over the Hong Kong-listed H-shares. The Shanghai stock index is below its 50-day moving average and below its 200-day moving average.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)

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