SHANGHAI, Feb 14 (Reuters) - China and Hong Kong stocks
were subdued on Tuesday, as Sino-U.S. tensions continued to curb
risk appetite and as investors awaited proof of an expected
recovery in the country's economy.
** China's blue-chip CSI300 Index dropped 0.3% by
the lunch break, while the Shanghai Composite Index was
little changed. Hong Kong benchmark Hang Seng rose 0.2%.
** Friction between China and the United States kept
investors cautious as Washington and Beijing traded accusations
about high-altitude balloons, souring market sentiment.
** Meanwhile, China's recovery bets are petering out as
investors are eyeing solid evidence that the economy is back on
its feet after Beijing scrapped its strict zero-COVID policy in
December.
** "The market is still battling between expectations of a
strong recovery, and the reality of mild growth", Capital
Securities wrote in a report.
** "The policy remains generally loose, but there have not
been stronger-than-expected measures announced or implemented."
** China Asset Management Co expects volatility in the short
term, saying the stock market rebound driven by recovery bets is
coming to an end.
** However, the mutual fund house remains sanguine over the
course of the year, recommending sectors including real estate,
chemicals, construction materials, computer and chip design.
** Most sectors traded sideways on Tuesday, with non-ferrous
metal rising nearly 1%, while new energy companies slid 0.9%.
** Meanwhile, Bloomberg News reported that U.S. Secretary of
State Antony Blinken is considering a meeting with China's top
diplomat Wang Yi at the Munich Security Conference.
** Investors are also eyeing U.S. inflation data due later
on the day.
** Some Hong Kong-listed units of Chinese brokerages,
including Haitong International and GF Securities continue to decline, after reports China bans Hong
Kong securities firms to solicit mainland Chinese clients.
** The Hang Seng Tech Index and healthcare stocks also fell.
(Reporting by Shanghai Newsroom; editing by Uttaresh.V)
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