China share index propped up by banks, property; Hong Kong sags

By: | Published: December 3, 2015 11:57 AM

China stocks held steady on Thursday morning, underpinned by banking and property shares, as some of the roughly 2 trillion yuan ($312.7 billion) locked up in Tuesday's initial public offerings starts to flow back to the market

China stock marketChina stocks held steady on Thursday morning, underpinned by banking and property shares, as some of the roughly 2 trillion yuan (2.7 billion) locked up in Tuesday’s initial public offerings starts to flow back to the market (Reuters)

China stocks held steady on Thursday morning, underpinned by banking and property shares, as some of the roughly 2 trillion yuan ($312.7 billion) locked up in Tuesday’s initial public offerings starts to flow back to the market.

But Hong Kong stocks weakened, with investors stepping back to assess the effects of diverging global monetary policies. The European central bank is widely expected to announce more quantitative easing this week, while the U.S. Federal Reserve will likely raise rates later this month.

The CSI300 index rose 0.4 percent to 3,735.93 points at the end of the morning session, while the Shanghai Composite Index gained 0.6 percent, to 3,557.71 points.

The market witnessed another day of strong performance in banking and property stocks, with investors ignoring weak August service activity data.

Shenzhen’s start-up board ChiNext also recovered much of Wednesday’s losses, as some of the money locked up in IPOs are being returned to investors.

“Investors seemed to have digested all the recent news, particularly the news related to regulatory supervision,” said Gerry Alfonso, Shanghai-based director of Shenwan Hongyuan Securities.

“There continues to be considerable expectation for stimulus with property shares clearly benefiting from it.”

China Vanke Co Ltd gained more than 3 percent on Thursday morning to a fresh 8-year high, having surged 20 percent during the previous two sessions.

The share jump prodded Goldman Sachs to remove Vanke from its conviction buy list, but the investment bank said it maintains a bullish view of the stock.

In Hong Kong, the Hang Seng index dropped 0.3 percent, to 22,418.80 points, while the Hong Kong China Enterprises Index lost 0.5 percent, to 9,996.32.

IT was the only main index that ended the morning session in positive territory.

Geely Auto lost 2 percent, as investors were not encouraged by the Chinese carmaker’s plan to launch a high-end car rental and ride-hailing app to compete with the likes of Uber.

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