China stocks rise on stimulus, drop in new coronavirus cases

China stocks rose about 2% on Tuesday as markets resumed trading after a long weekend, with investor sentiment lifted by Beijing's latest stimulus to shore up the world's second-largest economy and a drop in the new coronavirus cases.

** The Shanghai Composite index climbed 1.74% to 2,812.14 by the midday break. Chinese markets were closed on Monday for the Qingming Festival holiday.

** The blue-chip CSI300 index was up 1.97%, with its financial sector sub-index higher by 1.3%, the consumer staples sector up 2.71%, the real estate index gaining 0.83% and the healthcare sub-index up 2.13%.

** Chinese H-shares listed in Hong Kong rose 0.3% to 9,681.07, while the Hang Seng Index was up 0.28% at 23,815.49.

** The smaller Shenzhen index was up 2.69% and the start-up board ChiNext Composite index was higher by 2.85%.

** China's central bank said on Friday it was cutting the amount of cash that small banks must hold as reserves, releasing around 400 billion yuan ($56.38 billion) in liquidity to shore up the economy, which has been badly jolted by the coronavirus crisis.

** China has about 4,000 small and mid-sized banks. The latest cuts would lower their RRR to 6%.

** Overall, China is stepping up its domestic counter-cyclical measures to combat the epidemic's hit, though investors need to pay attention to the negative impact on external demand given the uncertainties around the outbreak overseas, Sinolin Securities analysts said in a report.

** Mainland China reported a drop in the new coronavirus cases after closing its borders to virtually all foreigners to curb imported infections, while the central city of Wuhan, the epicenter of the outbreak, saw no new deaths for the first time.

** Around the region, MSCI's Asia ex-Japan stock index was firmer by 0.88% while Japan's Nikkei index was up 0.66%.

** The yuan was quoted at 7.0817 per U.S. dollar, 0.17% firmer than the previous close of 7.0938.

** As of 04:16 GMT, China's A-shares were trading at a premium of 26.99% over the Hong Kong-listed H-shares.