China stocks rally as cyclicals gain on recovery hopes; Hong Kong shares down
* SSEC 0.9%, CSI300 0.9%, HSI -0.2%
* HK->Shanghai Connect daily quota used 6.3%, Shanghai->HK daily quota used 3.1%
* FTSE China A50 +1.0%
SHANGHAI, Nov 23 (Reuters) - China stocks climbed on Monday, helped by strong gains in cyclical firms on domestic and global economic recovery hopes, fuelled by COVID-19 vaccine progress.
** The CSI300 index was up 0.9% at 4,987.31 points at the end of the morning session, while the Shanghai Composite Index had risen 0.9% to 3,406.79 points.
** The CSI300 materials index and the CSI300 energy index led the gains, rising 3.4% and 3.5%, respectively by midday.
** A top official of the U.S. government's vaccine development effort said on Sunday that by mid-December the first vaccines could be given to U.S. healthcare workers and others recommended for inoculations.
** Despite accelerating COVID-19 infections in the United States, the forecast helped raise hopes that lockdowns that have paralysed the global economy could be nearing an end.
** There are expectations of a global economic recovery, as the vaccine will be available sooner or later, while China's domestic economic recovery has been confirmed, said Jin Jing, an analyst with Caitong Securities.
** Jin added valuations of cyclical firms remained low, adding to their appeal to investors, particularly to some mutual funds that could shift their positions at the end of the year.
** Analysts at investment bank CICC noted in a report they were optimistic about a valuation recovery for leading cyclical firms and high-growth cyclical companies, citing robust downstream demand.
** New energy firms also gained ground, as Beijing lifted subsidy target for 2021.
** Vice premier Liu He saying China would show "zero tolerance" for misconduct following a recent string of bond defaults, also helped sentiment.
** The Hang Seng index dropped 0.2% to 26,403.17 points, while the Hong Kong China Enterprises Index gained 0.8% to 10,642.15.
** The Hang Seng materials index had jumped 5.1% by midday. (Reporting by Luoyan Liu and Andrew Galbraith; Editing by Vinay Dwivedi)
