Hong Kong stocks steady after winning streak; China slips

Television Broadcasts

14/02/2017 04:49

* SSEC -0.1 pct, CSI300 -0.1 pct, HSI flat 
    * Hong Kong shares supported by Chinese demand 
    * China consumer, producer inflation pick up to multi-year 
highs 
    * Analysts do not expect a sustained reflation 
 
    SHANGHAI, Feb 14 (Reuters) - Hong Kong stocks held steady on 
Tuesday morning, supported by Chinese fund flows and a firm Wall 
Street, but gains were limited as investors locked in profits 
after a rising streak. 
    China's share markets edged lower, as analysts warned that 
inflation may soon reach a peak after Beijing posted 
higher-than-expected consumer and producer price inflation in 
January. 
    The city's benchmark Hang Seng index  .HSI  was flat at 
23,712.17 points, after rising to a four-month high on Monday, 
while the Hong Kong China Enterprises Index  .HSCE  gained 0.1 
percent, to 10,265.97 points. 
    The market was supported by rising southbound inflows 
through the Shanghai-Hong Kong Stock Connect, which used 25.4 
percent of Monday's daily quota, compared with an average of 
less than 11 percent in January. 
    "HK-listings represent a good bargain for onshore investors, 
who now have limited asset classes to invest in, due to physical 
property purchase restrictions onshore and the high valuations 
of M&A targets offshore," said Nomura analysts in a research 
note, adding that Hong Kong stocks staged a mini-rally partly 
due to recent mainland demand. 
    Investors were also watching how forceful the Federal 
Reserve chief would be in keeping alive the prospect of a 
interest rate hike in March when she testifies to Congress later 
on Tuesday. A trend of rising rates would weigh on the 
rate-sensitive property shares  .HSNP  but benefit the financial 
sector  .HSCIF . Both sectors made modest gains in early 
trading.  
    Most sectors retreated by the lunch break, but an index 
tracking services stocks  .HSCIS  gained 1.8 percent.  
    Television Broadcasts Ltd  0511.HK  jumped 8.2 percent after 
the company said it was cutting the size of a planned buyback 
but lifting the offer price, as the broadcaster moved to counter 
a potentially hostile investor.  urn:newsml:reuters.com:*:nL4N1FZ0QL  
     
    MAINLAND STOCKS 
    Both China's CSI300 index  .CSI300  and the Shanghai 
Composite Index  .SSEC  fell 0.1 percent at the end of the 
morning session, to 3,432.24 points and 3,212.43 points, 
respectively. 
    China's consumer inflation rate in January grew the most 
since May 2014 compared with the previous year, and its producer 
price index rose the fastest since August 2011, both beating 
market expectations and adding to signs of economic recovery. 
 urn:newsml:reuters.com:*:nL4N1FZ1CT 
    Capital Economics analysts cautioned in a research note that 
both indexes would peak soon and "hopes for a sustained 
reflation in China will be disappointed." 
    The real estate sector  .CSI300REI  inched up 0.3 percent at 
midday.  
    Most top developers surveyed by Reuters planned to increase 
their land investments in 2017, but analysts said the property 
sector remained under pressure this year facing tightening 
restriction and Beijing's pledge to contain asset bubbles. 
 urn:newsml:reuters.com:*:nL4N1FY2FJ 
    Shares of Leshi Internet Information and Technology Corp 
Beijing  300104.SZ  were among the best performers in the 
blue-chip CSI300, rallying 4.3 percent by midday. The company's 
controlling shareholder proposed awarding 20 new shares for 
every 10 shares held by all investors.  urn:newsml:reuters.com:*:nL4N1FZ1E3 
 
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China stock market graphics suite     http://reut.rs/1NfkoGl 
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 (Reporting by Jackie Cai and John Ruwitch; Editing by 
Jacqueline Wong) 
 ((Jackie.Cai@thomsonreuters.com; +86 021 6104 1775;)) 
 
Keywords: CHINA STOCKS/MIDDAY