China, HK stocks climb as upbeat service sector buoys risk-on mood

China and Hong Kong shares rose on Friday, led by defence and oil stocks, as a private sector survey confirmed prospects of strong recovery in the world's second-biggest economy, lifting risk-on appetite. ** China's blue-chip CSI300 Index edged up 0.03% at the lunch break, while the Shanghai Composite Index gained 0.17%%.

China and Hong Kong shares rose on Friday, led by defence and oil stocks, as a private sector survey confirmed prospects of strong recovery in the world's second-biggest economy, lifting risk-on appetite.

** China's blue-chip CSI300 Index edged up 0.03% at the lunch break, while the Shanghai Composite Index gained 0.17%%. ** Hong Kong benchmark Hang Seng was up 0.71%, and Hang Seng China Enterprises Index rose 1.03%.

** Asian shares rose on Friday after Wall Street reversed losses on signals of a measured policy tightening approach from the U.S. Federal Reserve as well as on prospects of a solid economic recovery in China. ** Activity in China's services sector expanded at the fastest pace in six months in February as the removal of tough COVID-19 restrictions revived customer demand, data from a private sector survey showed on Friday.

** The Caixin/S&P Global services purchasing managers' index (PMI) rose to 55.0 in February from 52.9 in January. The 50-point mark separates expansion and contraction in activity on a monthly basis. ** "Sentiment improved ahead of National People's Congress (NPC) as a stronger and broader growth recovery unfolded in February," Morgan Stanley said in a research note published on Thursday.

** The annual session of the NPC kicks off this weekend and will set economic targets and elect new top economic officials. ** "We expect further upside for Chinese equities as the macro story stays intact," it said.

** Leading the gains in China were aerospace and defence-related stocks. Shenzhen-listed AVIC Xian Aircraft Industry Group rose 5.11%, hitting a near four-month high. ** The CSI Semiconductors and Semiconductor Equipment Index gained 1.51%.

** In Hong Kong, oil stocks such as ENN Energy also supported gains in the blue-chip Hang Seng Index, up 3%. ** Wynn Macau dropped to a three-month low, down 5.07%, after announcing a proposed $600 million convertible bond issuance that matures in 2029. The bonds are convertible into shares at a price of HK$10.24 per share.