* CSI300 -0.3 pct; SSEC -0.5 pct; HSI flat
* China stocks trade at 37 percent premium to Hong Kong peers
SHANGHAI, Jan 28 (Reuters) - China and Hong Kong stocks showed some signs of stabilisation on Thursday morning after recent sharp falls eased selling pressure and on demand for selected blue chips.
“The market was more stable after it slumped so heavily of late,” said Liu Jingde, an analyst at Cinda Securities in Beijing.
“The main reason may be some blue chip stocks were supporting the market, capping the indexes’ falls.”
The CSI300 index edged down 0.3 percent to 2,922.14 points by midday, while the Shanghai Composite Index lost 0.5 percent, to 2,722.55 points.
The Hang Seng index was unchanged at 19,061.00 points, while the Hong Kong China Enterprises Index gained 0.2 percent, to 7,976.76.
The index measuring price differences between dual-listed companies in Shanghai and Hong Kong stood at 136.89, dropping 0.8 percent, indicating a narrowing of the premium of Shanghai share prices versus Hong Kong‘s.
The northbound quota for the Hong Kong-Shanghai Stock Connect, currently set at 13 billion yuan, saw net inflows of 0.08 billion yuan, indicating some bargain-hunting in Shanghai after the recent sell-off.
Traders said one morning’s bargain hunting could not be interpreted as a trend.
An earlier report showed that Chinese stock investors were finally seeing value in domestic shares, but instead of wading back into battered onshore exchanges, they had mainly gone shopping for bargains in Hong Kong.
Nanjing Xinjiekou Department Store Co was one of Thursday’s biggest losers in the Shanghai market, hitting its 10-percent daily limit-down to trade at 30.4 yuan by midday.
The company’s shares resumed trading on Wednesday after being suspended for about half a year due to corporate restructuring. While the restructuring was seen as positive for the company, its share price was catching up with the market’s losses during its suspension, traders said.
The Shanghai Composite Index slumped 6.4 percent on Tuesday and tumbled another 4 percent in intraday trading on Wednesday, before suspected government fund support enabled the market to trim losses to close down 0.5 percent.
Chinese stocks have been persistently weak since June, under pressure from rich valuations and worries over the negative impact from the government’s clamp down on irregular market practices.
Reporting by Samuel Shen, Pete Sweeney and Lu Jianxin; Editing by Jacqueline Wong