China stocks rise as economic rebound hopes stay intact

* SSEC +0.3%, CSI300 +0.2%, HSI +0.6%, HSCE +0.5%

* Caixin services PMI down m-o-m but recovery continues

* Financials lose steam; tech, consumption shares rise

HONG KONG, Aug 5 (Reuters) – China stocks rose marginally on Wednesday as investor confidence in the country’s economic upswing stayed intact, though a drop in financials tamed the broader market’s strength.

** At the midday break, the Shanghai Composite index was up 0.4% at 3,381.35 points. ** China’s blue-chip CSI300 index was up 0.2%, with the consumer staples sector rising 0.1% and consumption discretionary advancing 0.5%. ** Chinese H-shares listed in Hong Kong rose 0.5%, while the Hang Seng Index climbed 0.6% to 25,088.36. ** The smaller Shenzhen index added almost 1%, the start-up board ChiNext Composite index gained 1.5% and Shanghai’s tech-focused STAR50 index rose 1.7%​.

** Growth in China’s services sector slowed in July from a decade high the previous month, but remained in expansion territory, an industry survey showed on Wednesday.

** The recovery in the services sector – accounting for 60% of the economy – has gathered pace in recent months as the nationwide social restrictions lifted. ** China reported 27 new coronavirus cases in the mainland for Aug. 4, down from 36 cases a day earlier.

** Financial sector stocks, which rallied on cheap valuations in the previous session, fell 0.8% on Wednesday.

** “We had an upward move from financials yesterday which failed to follow through today,” said Alex Wong, director at Ample Finance Group, noting that the sector’s outlook remained poor.

** “But people are still buying into China consumption, the big caps are doing okay today. The mood in the market is overall positive,” he added.

** Senior U.S. and Chinese officials will review the implementation of their Phase 1 trade deal on Aug. 15. Beijing’s top U.S. envoy said it does not want further tensions.

** Around the region, MSCI’s Asia ex-Japan stock index firmed 0.6% while Japan’s Nikkei index dipped 0.2%. (Reporting by Noah Sin, Editing by Sherry Jacob-Phillips)

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