China shares ease after soft PMIs, Hong Kong rebounds
SHANGHAI Dec 1 (Reuters) - China's share markets held a soft tone on Tuesday, hurt by weak factory activity despite the International Monetary Fund's decision to grant the yuan global reserve currency status.
The CSI300 index fell 0.2 percent to 3,559.95 points by 0246 GMT, while the Shanghai Composite Index lost 0.2 percent to 3,439.78 points.
Traders said that the IMF's decision to add the Chinese currency to its Special Drawing Rights (SDR) basket was long expected, and its impact to the stock market was neutral.
"Theoretically, the move would make yuan assets more attractive to global investors over the long term," said Samuel Chien, partner of hedge fund manager Shanghai Boom Trend Investment Management Co.
"But on the other hand, there's also high expectation of further yuan depreciation as Beijing needs a weaker currency to support its struggling manufacturing sector."
An official survey showed on Tuesday that activity in the manufacturing sector contracted for a fourth straight month to a three-year low, adding to signs of persistent economic weakness despite a flurry of stimulus moves.
Chien expected Chinese stocks to be volatile as the market prepares for a possible U.S. interest rate hike this month.
Most sectors strengthened, as real estate stocks jumped for the second day. But banking heavyweights dragged the market, with an index tracking the sector down more than 1 percent.
Hong Kong stocks rebounded sharply.
The Hang Seng index added 1.5 percent, to 22,329.85 points, while the Hong Kong China Enterprises Index gained 2.0 percent, to 9,986.53. (Reporting by Samuel Shen and Pete Sweeney; Editing by Jacqueline Wong)
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