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China stocks rise to 6-week closing high on trade deal, upbeat data

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SHANGHAI — China stocks rose to a six-week closing high on Monday, as investors cheered a preliminary Sino-U.S. trade deal and upbeat data pointing to resilience in the world’s second-largest economy.

** The blue-chip CSI300 index rose 0.5%, to 3,987.55, while the Shanghai Composite Index added 0.6% to 2,984.39, its highest close since Nov. 8.

** The United States and China cooled their trade war on Friday, announcing a “Phase one” agreement that reduces some U.S. tariffs in exchange for what U.S. officials said would be a big jump in Chinese purchases of American farm products and other goods.

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** The deal will nearly double U.S. exports to China over the next two years and is “totally done” despite the need for translation and revisions to its text, U.S. Trade Representative Robert Lighthizer said on Sunday.

** Analysts said they expected the deal to help reduce external uncertainties for the A-share market and boost market sentiment, though some sounded a cautionary note given the long-term character of the disputes between the two countries.

** Investors shall not be overly optimistic, as disputes between Beijing and Washington on trade and technology would remain in the long term and would continue to disturb the global economy and financial market, analysts at Shanxi Securities said in a report.

** A slew of rosy economic data also helped underpin the market.

** Growth in China’s industrial and retail sectors beat expectations in November, as government support propped up demand and amid easing trade hostilities with Washington.

** The recent positive developments remove some clouds from China’s economic outlook and also mitigate the immediate need for stimulus to support ambitious growth targets.

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** China plans to set a lower economic growth target of around 6% in 2020 from this year’s 6%-6.5%, relying on increased state infrastructure spending to ward off a sharper slowdown, policy sources said.

** Around the region, MSCI’s Asia ex-Japan stock index was firmer by 0.22%, while Japan’s Nikkei index was down 0.29%.

** The yuan was quoted at 7.0028 per U.S. dollar, 0.01% weaker than the previous close of 7.002.

** So far this year, the Shanghai stock index is up 19%, while China’s H-share index is up 7.0%. Shanghai stocks have risen 3.33% this month.

** As of 07:05 GMT, China’s A-shares were trading at a premium of 26.88% over the Hong Kong-listed H-shares. (Reporting by Luoyan Liu and John Ruwitch; Editing by Subhranshu Sahu)

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