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Shanghai shares rise on recovery signs, bluechips trim…

SHANGHAI, Aug 10 – Shanghai’s benchmark share index rose on Monday and blue-chip shares trimmed early losses, after new data showed factory deflation eased last month in China, adding to signs of a recovery from the coronavirus crisis in the world’s second-largest economy.

** At the midday break, the Shanghai Composite index was up 0.42% at 3,368.27. The blue-chip CSI300 index was down 0.05%, trimming earlier losses of as much as 1.31%. ** China’s factory deflation eased in July, driven by a rise in global oil prices and as industrial activity climbed back towards pre-coronavirus levels, adding to signs of economic recovery. ** But Sino-U.S. tensions continue to weigh on broader sentiment after Beijing’s top representative office in Hong Kong denounced sanctions imposed by Washington on senior Hong Kong and Chinese officials. ** The sanctions came ahead of a Taiwan visit on Monday by U.S. Health Secretary Alex Azar, the highest-level U.S. official to visit the island in four decades. China has condemned the trip and promised retaliation. ** The tensions, and in particular the impact on index heavyweight Tencent Holdings Ltd, pulled shares lower in Hong Kong, where H-shares fell 0.38% to 10,024.69 and the Hang Seng Index fell 0.36% to 24,443.73. ** Tencent shares dropped 3.32%, taking its losses since Wednesday to 9.09%. ** “The restrictions’ focus has been (Tencent’s popular messaging service) WeChat, but what investors worry about is that it could spread to other businesses,” said Steven Leung, executive director for institutional sales at UOB Kay Hian. ** The smaller Shenzhen index dropped 0.41%, the start-up board ChiNext Composite index lost 1.19% and Shanghai’s tech-focused STAR50 index shed 1.13%. ** Around the region, MSCI’s Asia ex-Japan stock index was firmer by 0.15% while Japan’s Nikkei index was down 0.39%. ** The yuan was quoted at 6.967 per U.S. dollar, flat compared to the previous close of 6.967. (Reporting by Andrew Galbraith; Editing by Rashmi Aich)

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