July 16, 2020 / 9:01 AM / a month ago

HK shares fall on concerns about policy tightening, Sino-U.S. spat

* HSI falls 2%, the biggest slump since June 15

* China GDP growth beats expectation, leading to signs of tightening

* Beijing warns retaliation against Hong Kong Autonomy Act

SHANGHAI, July 16 (Reuters) - Hong Kong shares on Thursday fell the most in more than a month, weighed down by concerns about policy tightening after China posted a better-than-expected economic rebound in the second quarter and as Sino-U.S. relations deteriorated. ** At the close of trade, the Hang Seng index was down 510.89 points or 2% at 24,970.69. The Hang Seng China Enterprises index fell 2.47% to 10,133.92. ** The sub-index of the Hang Seng tracking energy shares fell 1.7%, while the IT sector dropped 6.49%, the financial sector ended 1.27% lower and the property sector slipped 1.51%. ** The top gainer in the Hang Seng index was MTR Corp Ltd , which gained 0.9%, while the biggest loser was Geely Automobile Holdings Ltd, which closed 11.98% weaker. ** China's main Shanghai Composite index closed down 4.5% at 3,210.10 points, while the blue-chip CSI300 index ended down 4.81%.

** China's economy returned to growth in the second quarter after a deep slump at the start of the year, but unexpected weakness in domestic consumption underscored the need for more policy support to bolster the recovery after the shock of the coronavirus crisis. ** "Policy will remain supportive, but the pace of loosening may moderate given the strong credit expansion of the past months and the recent market surge," said Nathan Chow, economist at DBS Bank in Singapore. ** On Wednesday, Beijing warned of retaliatory sactions and summoned the U.S. ambassador to protest at the Hong Kong Autonomy Act passed by the U.S. Congress and signed by President Donald Trump, showing signs of further escalation in the Sino-U.S. tension. ** Around the region, MSCI's Asia ex-Japan stock index was weaker by 1.76%, while Japan's Nikkei index closed down 0.76%. ** The yuan was quoted at 6.9986 per U.S. dollar at 0832 GMT, 0.14% weaker than the previous close of 6.9885. (Reporting by Zhang Yan and Andrew Galbraith in Shanghai, Editing by Sherry Jacob-Phillips)

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