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China stocks rise on infra boost, Sino-U.S. tensions cap gains

* SSEC 0.4%, CSI300 0.2%, HSI -0.3%

* HK->Shanghai Connect daily quota used 4%, Shanghai->HK daily quota used 3.2%

* FTSE China A50 +0.4%

SHANGHAI, March 12 (Reuters) - China stocks eked out gains on Friday, underpinned by strength in infrastructure firms, although Sino-U.S. tensions capped the rise.

** The CSI300 index rose 0.2%, to 5,139.87 at the end of the morning session, while the Shanghai Composite Index gained 0.4%, to 3,449.86.

** The CSI300 infrastructure jumped 3.9% and was set for its best day since July 6, 2020, thanks in part to its low valuations after underperforming the market for a long time.

** Chinese Premier Li Keqiang defended the government’s target for more than 6% economic growth this year, saying it is “not low”, and policies would not be dramatically loosened to chase higher growth.

** Helping sentiment further, a retreat in U.S. bond yields overnight eased global concerns about rising inflation.

** “Risk appetite could pick up again, as the U.S. yield rally lost momentum for now,” Yan Kaiwen, analyst with China Fortune Securities, noted in a report.

** But, investors also watched negative developments around Sino-U.S. relations.

** The United States on Thursday condemned Chinese moves to change Hong Kong’s electoral system and forecast “difficult” talks with Beijing’s top diplomats next week.

** Shares of Huawei suppliers retreated as the U.S. administration added new limits on these companies.

** The Hang Seng index dropped 0.3% to 29,311.88, while the Hong Kong China Enterprises Index gained 0.7%, to 11,416.60.

** Around the region, MSCI’s Asia ex-Japan stock index was firmer by 0.62% while Japan’s Nikkei index was up 1.37%.

** The yuan was quoted at 6.4875 per U.S. dollar, up 0.11%.

** As of 0401 GMT, China’s A-shares were trading at a premium of 32.54% over the Hong Kong-listed H-shares. (Reporting by Luoyan Liu and Andrew Galbraith; editing by Uttaresh.V)

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