Chinese stocks end higher on economic recovery; more data at a glance

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SHANGHAI (Reuters) – Chinese stocks closed lower in limited trading on Tuesday, while Hong Kong stocks rose for a third straight session as China recovers from the impact of COVID outbreaks. -19, although analysts are signaling risks of a correction.

**The blue-chip CSI300 index ended down 0.1% at 4,325.57, while the Shanghai Composite index lost 0.3% at 3,306.72 points.

** The Hang Seng Index rose 1.9% to 21,559.59, while the Chinese Enterprise Index gained 2.0% to 7,549.58.

** “China is on the path to economic recovery, providing a favorable moment for its stock market,” said Max Luo, director of China asset allocation at UBS Asset Management.

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** “The pace of recovery depends on policy change, and we are awaiting economic data due in June and July to review the recovery,” Luo said. “If the numbers aren’t strong enough, we can expect more growth-friendly measures.”

** Still, some analysts have reported concerns about the market rising. “There are signs that the market is a bit overheated, and then there are risks of correction,” said Wang Mengying, equity index futures analyst at Nanhua Futures.

**The CSI300 index rebounded around 15% from a recent low in late April as trading activity also picked up. Turnover in Chinese stocks topped 1 trillion yuan ($149 billion) for an eighth straight session.

** “It’s just a correction in a bullish economic cycle, which will not lead to a bear market,” UBS’s Luo added.

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**The CSI300 real estate index rose 0.4% and the mainland Hang Seng property index gained 1.2%, as data from last week signaled a rapid recovery in property sales.

** Analysts, however, have said the housing market recovery will be slow and they are monitoring more data to see if the rebound can be sustained.

** Non-Ferrous Metals fell 3.1%, while New Energy Vehicles and Defense stocks fell 1.6% and 2.3%, respectively.

**Hong Kong-listed tech giants rose 2.2%. Tencent Holdings added 2.8% when announcing to its staff on Monday the official formation of an “extended reality” (XR) unit, officially placing its bets on the concept of a metaverse of virtual worlds.

** The health care sub-index jumped more than 5% and the financials sub-index added 2.4%. (Reporting by Shanghai Newsroom; Editing by Sherry Jacob-Phillips and Uttaresh.V)

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