China shares rise as virus cases drop, auto stocks rally

* SSEC +0.2%, CSI300 +0.5%, HSI -0.5%

* China sees fewest daily new COVID-19 cases in more than a month

* Auto shares lead gains backed by strong sales growth

BEIJING, Feb 3 (Reuters) - China shares rose on Wednesday, boosted by automobile makers that gained on expectations of strong sales growth this year and easing concerns about COVID-19 outbreak after daily new cases dropped to their lowest in more than a month. ** At the midday break, the Shanghai Composite index was up 0.2% at 3,540.65 and the blue-chip CSI300 index was up 0.51%. ** Leading the gains, the auto sector sub-index surged 5.5%, the rare earth sector gained 3.7% and the healthcare sub-index was up 2.13%.

** Chongqing Changan Automobile Co Ltd reported a growth of 87.2% in its January vehicle sales from a year ago, while the country’s industry association forecast a 4% rise in total annual vehicle sales for 2021 at 26.3 million units.

** Meanwhile, China reported the fewest number of new COVID-19 cases for a single day in more than a month, the latest indication that the current wave of the disease is subsiding ahead of the Lunar New Year holidays.

** The smaller Shenzhen index was up 0.28%, the start-up board ChiNext Composite index was higher by 1.3% and Shanghai’s tech-focused STAR50 index was down 0.41%. ** Chinese H-shares listed in Hong Kong rose 0.03% to 11,612.25, while the Hang Seng Index was down 0.47% at 29,110.75.

** A sub-index of the Hang Seng index tracking energy shares rose 1.4%, while the IT sector added 1%.

** Alibaba Group Holding Ltd beat estimates for third-quarter revenue on a pandemic-driven jump in e-commerce, but its shares dropped 3.9% amid regulatory heat for founder Jack Ma’s business empire. ** Around the region, MSCI’s Asia ex-Japan stock index was firmer by 1.35% while Japan’s Nikkei index was up 0.68%. ** The yuan was quoted at 6.4596 per U.S. dollar, down 0.05%. (Reporting by Shanghai Newsroom; editing by Uttaresh.V)