China stocks were steady on Friday morning, as weakness in banking and energy heavyweights offset a second-day of gains for small-caps.
But Hong Kong shares advanced more than 1 percent, tracking global markets after the European Central Bank (ECB) signalled more policy stimulus was on the cards.
The CSI300 index was unchanged at 3,524.36 points at the end of the morning session, while the Shanghai Composite Index was also virtually flat at 3,369.43 points.
The Hong Kong market took its cues from a rally in global equities thanks to ECB’s readiness to extend its bond-buying programme to stoke the euro zone economy and spark inflation there.
Still, some investors on the mainland took profit from the recent rebound, although optimism has crept back into the market after a rout in the summer.
“After volatile adjustment over past three months, the risks have been released, and more stocks have entered the area for investment…we can be more positive now,” Ni Quansheng, a fund manager with Zheshang Fund said in a quarterly report published on its website on Friday.
China’s health care subindex jumped more than 2 percent by lunch time, driven by expectations the government will issue more policies to support the industry as part of Beijing’s new “five-year plan” likely to be unveiled next week.
In Hong Kong, the Hang Seng index rose 1.3 percent, to 23,150.70 points, and the Hong Kong China Enterprises Index gained 1.2 percent, to 10,724.50.
Major airline companies Air China Ltd’s and China Southern Airlines Co Ltd in both Shanghai and Hong Kong slumped on Friday after they dismissed a media report of a possible merger of the two.