China stocks jump to three-month high, HK rallies on ceasefire optimism

HONG KONG, June 24 (Reuters) - China and Hong Kong stocks rose on Tuesday, joining a broader rally across Asia, as global risk appetite improved following U.S. President Donald Trump's announcement of a ceasefire between Israel and Iran.

At midday trading break, the Shanghai Composite Index .SSEC gained 1% to 3,415.45, the highest level since March 20. The blue-chip CSI300 Index .CSI300 climbed 1.1% to a one-month high.

Hong Kong benchmark Hang Seng .HSI was up 1.9%, the biggest single-day gain in over five weeks.

Around the region, MSCI's Asia ex-Japan stock index .MIAPJ0000PUS was firmer by 2.3%, while Japan's Nikkei index .N225 was up 1.1%.

Markets reacted positively to the news that U.S. President Donald Trump announced a complete ceasefire between Israel and Iran, potentially ending the 12-day war that saw millions flee Tehran and prompted fears of further escalation in the war-torn region.

Risk sentiment in China markets probably won't get much worse from here, and further dips on Middle East tensions might signal a new round of buying opportunities, analysts at Bank of China (International) Securities said in a note.

On Tuesday, the CSI AI index .CSI930713 led onshore markets with a 1.9% rally, while the financial sector sub-index .CSI300FS climbed 1.2% and consumer staples sector .CSI000912 added 1.1%.

Tech firms and car makers led gains in Hong Kong, with Hang Seng Automobile Index .HSAMI adding over 3% and the Hang Seng Tech Index .HSTECH climbing 2.3%.

China's yuan also strengthened to its highest level in nearly two weeks against a broadly weaker U.S. dollar on Tuesday.