China shares rise on U.S. Fed's QE promise, but jump in virus cases caps gain

Chinese equities rose on Tuesday, tracking a regional rally after the U.S. Federal Reserve unleashed a barrage of support measures to ease a global cash crunch, although a sharp rise in new coronavirus cases in China checked gains. ** At the midday break, the Shanghai Composite index was 1.48% higher at 2,699.43 points, trimming gains after earlier rising more than 2.3%. ** The U.S. Fed said on Monday that it would for the first time back purchases of corporate bonds, backstop direct loans to companies and expand its asset purchases by as much as needed to stabilize financial markets. ** China's blue-chip CSI300 index was 1.85% higher after earlier gains of up to 2.75%. Its financial sector sub-index gained 1.88%, the consumer staples sector jumped 3.02%, the real estate index added 1.57% and the healthcare sub-index rose 2.26%. ** Mainland China reported a doubling in new coronavirus cases, driven by a jump in infected travellers returning home from overseas, raising the risk of transmissions in Chinese cities and provinces that had seen no new infections in recent days. ** The spread of the coronavirus epidemic hammered business activity in the first quarter in China, with deterioration even as firms were supposed to be going back to work, a private survey showed. ** After surveying thousands of Chinese firms, China Beige Book International suggested that "a 10-11% GDP contraction in the first quarter is not unreasonable." ** Chinese H-shares listed in Hong Kong rose 3.96% to 9,097.9, while the Hang Seng Index was up 3.56% at 22,468.79. ** The smaller Shenzhen index was up 1.08% and the start-up board ChiNext Composite index was higher by 1.49%. ** Around the region, MSCI's Asia ex-Japan stock index was firmer by 3.55% while Japan's Nikkei index was up 4.30%. ** The yuan was quoted at 7.0841 per U.S. dollar, 0.08% firmer than the previous close of 7.09. ** So far this year, the Shanghai stock index is down 12.78%, while China's H-share index is down 21.6%. Shanghai stocks have declined 7.64% this month.

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