China stocks fall; Hong Kong up on audit deal hopes

China stocks closed lower on Friday as COVID-19 outbreaks and property woes kept investor sentiment subdued, with energy suppliers and chipmakers leading the decline. Hong Kong shares rose, buoyed by news of possible progress in China-U.S. talks to hammer out an audit deal.

China stocks closed lower on Friday as COVID-19 outbreaks and property woes kept investor sentiment subdued, with energy suppliers and chipmakers leading the decline.

Hong Kong shares rose, buoyed by news of possible progress in China-U.S. talks to hammer out an audit deal. ** China's CSI 300 index lost 0.2% at close, while the Shanghai Composite Index closed 0.3% lower.

** The Hang Seng Index and the Hang Seng China Enterprises Index both added roughly 1%. ** For the week, the CSI 300 index retreated 1%, while the Hang Seng Index added 2%, the most in two months.

** Consumer staples and tourism stocks gained 1.1% each, while non-ferrous metal shares rose 0.8%. ** However, energy companies lost 2%, with coal miners down 2.7%, and semiconductors dropped 1.7%.

** The energy subindex still gained nearly 7% for the week, amid shortage of power supply due to China's longest and most widespread heatwave in decades. ** China's energy shortage could lead to higher demand for copper and aluminium as the power constraints highlighted the need for increasing grid investments, ANZ analysts said.

** China's equity market is expected to break through current range-bound performance if the anti-virus measures are adjusted and confidence in the property market is revived, said the CIO office of UBS Global Wealth Management. ** Hong Kong shares of PetroChina rose 3.3% after the company posted a record first-half profit, thanks to an increase in its oil and gas output and higher energy prices.

** Tech giants listed in Hong Kong added 0.8%, following a 6% surge in the previous session. ** The United States and China are nearing an agreement allowing American accounting regulators to travel to Hong Kong to inspect audit records of U.S.-listed Chinese companies, the Wall Street Journal reported on Thursday.

** Sources told Reuters Beijing has asked some U.S.-listed Chinese companies and their audit firms to prepare for American inspections in Hong Kong. ** The news also boosted other Asian shares, while traders anxiously awaited a speech from Federal Reserve Chair Jerome Powell for clues on rate hikes.