* HSI -0.1 pct, H-shares -0.6 pct, CSI300 -0.4 pct
* China cement producers rise on policies to rebuild shanty towns
* Greentown China plunges on profit warning
* WH Group jumps up to 11 pct in HK debut (Updates to midday)
By Grace Li
HONG KONG, Aug 5 (Reuters) - Hong Kong and China shares slipped on Tuesday after a survey showed growth In China’s services sector fell to a record low, with property developers the main underperformers.
The HSBC/Markit China services purchasing managers’ index (PMI) fell to 50.0 in July, the lowest reading since November 2005 when the data collection began, indicating a recovery in the broader economy is still fragile and may need further government support.
By midday, the Hang Seng Index inched 0.1 percent lower at 24,572.63 points, while the China Enterprises Index of the top Chinese listings in Hong Kong lost 0.6 percent.
The CSI300 of the leading Shanghai and Shenzhen A-share listings fell 0.4 percent, while the Shanghai Composite Index was off 0.3 percent at 2,216.42 points. Both closed at their highest in almost eight months on Monday.
Zheng Weigang, a senior trader at Shanghai Securities, said he did not see a big impact from the services PMI on the markets. “Economic data need to corroborate each other. We need further observation at the moment.”
“Most investors are still in bullish mood and inclined to choose those blue-chips which have growth potential in the current macroeconomic environment. It’s not crazy optimism but cautious optimism,” Zheng added.
Some economists blamed a slowdown in the housing market for the weak reading, as property-related activities saw less business. Two private surveys on Friday showed China’s home prices fell further in July from the previous month.
China Vanke, the country’s biggest residential property developer, shed 1.6 percent after posting July sales which showed a big drop from June.
Smaller rival Greentown China tumbled 12.8 percent in Hong Kong as the developer said late on Monday it expected a decrease in net profit of more than 65 percent for the first half.
Cement counters were stronger on hopes that the recently announced policy to rebuild shanty towns which currently accommodate around 100 million people will buoy demand. Anhui Conch Cement rose 1.4 percent, top percentage gainer on the H-share index.
WH Group, the world’s biggest pork company, jumped as much as 11 percent in its Hong Kong trading debut on Tuesday after pulling off its second attempt at an IPO by slashing valuations to raise $2.1 billion.
ANTA Sports climbed another 1.2 percent to a three-year high ahead of its interim earnings release on Wednesday. It added 3.6 percent on Monday after the company said it had become the sponsor of China’s national gymnastics team.
Top index on the Hang Seng was HSBC Holdings, which gained 0.8 percent after reporting a a 12 percent drop in first-half profit on Monday.
Nomura said in a note on Tuesday the earnings downgrade cycle should stop for HSBC, citing a better revenue outlook in July-December 2014 owing to an improving macroeconomic situation in Asia and expectations of higher rates in the UK and US. (Editing by)