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China stocks rise as officials say worst in COVID battle is over

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SHANGHAI — China stocks rose on Friday, although trading volume slipped ahead of the Lunar New Year holidays, as strong foreign inflows boosted sentiment after the country said the worst in its battle against COVID-19 was over.

** China’s blue-chip CSI 300 Index and the Shanghai Composite Index gained 0.5% each by the end of the morning session.

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** Hong Kong’s Hang Seng Index added 1%, while the Hang Seng China Enterprises Index climbed 1.5%.

** In the week ahead of China’s new year holidays, the CSI 300 Index added 2.5% so far, while the Hang Seng benchmark edged up 0.6%.

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** China said the worst was over in its battle against COVID-19 ahead of what is expected to be the busiest day of travel in years on Friday, a mass movement of people that has fed fears of a further surge in infections.

** Foreign investors had bought a net 6.9 billion yuan ($1.02 billion) of China shares via the Stock Connect scheme in a 13th buying streak so far on Friday.

** In only three weeks of 2023, foreign buying of Chinese stocks reached 110 billion yuan ($16.22 billion) and exceeded last year’s total.

** Resource shares jumped 2.8%, new energy firms added 1.8%, and infrastructure companies climbed 2.3%.

** Tech giants listed in Hong Kong advanced 1.6%, with food-delivery giant Meituan up 4%.

** “Investor sentiment edged down ahead of Chinese New Year (CNY) on quieter trading activities,” said Morgan Stanley in a note.

** “Market factors supportive of Chinese equities continue to play out; CNY effect may trigger temporary profit taking and could offer buy-the-dip opportunities.”

** Separately, China kept benchmark lending rates unchanged for a fifth month on Friday, as expected, but analysts say future cuts are possible as the central bank has pledged to support the COVID-ravaged economy. ($1 = 6.7806 Chinese yuan) (Reporting by Shanghai Newsroom; editing by Uttaresh.V)

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