August 17, 2016 / 2:52 AM / in 2 years

UPDATE 1-China stocks mixed in early trade after Shenzhen-Hong Kong connect plan

(Adds analyst quote, trading volumes)

SHANGHAI, Aug 17 (Reuters) - China’s major stock indexes were mixed in early trade Wednesday after the approval of the launch of a long-awaited scheme to allow stock trading between Hong Kong and Shenzhen, the world’s second-busiest, and tech-heavy, exchange.

The CSI300 index which tracks the largest listed companies trading in Shanghai and Shenzhen opened down flat at 3,377.77 points and was up less than 0.1 percent in early trade, while the Shanghai Composite Index opened down 0.1 percent at 3,106.99 points and was trading down 0.2 percent in early trade.

The ChiNext growth board index in Shenzhen opened flat and was up 0.2 percent in the middle of the morning session.

Trading volume on the Shenzhen exchange was 5.67 billion shares as of 10:00 am, slightly down from Tuesday’s 5.9 billion figure.

Analysts said the approval of the Hong Kong-Shnzhen connect scheme had been expected, so the market reaction was muted.

“Moreover, the scheme will not introduce a lot of funds to mainland markets judging from the Shanghai-Hong Kong stock link,” said Xiao Shijun, analyst at Guodu Securities in Beijing.

Over the longer run, Xiao expected a correction of the valuation gap between Hong Kong and mainland markets. Despite the launch of Shanghai-Hong Kong connect last year, many dual listed shares have continued to trade at a discount in Hong Kong.

The Hang Seng index in Hong Kong opened up 0.4 percent at 22,995.51 and was up 0.3 percent in early trade. (Reporting by Nathaniel Taplin and Winni Zhou; Editing by Simon Cameron-Moore)

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