March 7, 2017 / 5:00 AM / a year ago

China stocks cool as investors study premier's report; Hong Kong up

* SSEC -0.1 pct, CSI300 -0.1 pct, HSI +0.4 pct

* China 2017 corporate profit expected to rise 6 pct - UBS

* UBS: CSI300 index can hit 3,750 points this year

SHANGHAI, March 7 (Reuters) - China stocks were barely changed on Tuesday morning as investors who the previous day got excited by comments about technology in a work report by Premier Li Keqiang pored over the government document.

But Hong Kong shares were firm, led by a rally in mainland property developers listed in the city.

Both China’s blue-chip CSI300 index and the Shanghai Composite Index dipped 0.1 percent by the lunch break, to 3,444.14 points and 3,231.63 points, respectively.

The premier’s Work Report, released on Sunday at the opening of the annual National People’s Congress, identified innovation as a key part of China’s economic restructuring. The report mentioned artificial intelligence for the first time.

On Monday, the report sent the technology sector and main indexes higher.

But investor fervour about tech stocks cooled on Tuesday, as investors shifted attention to other aspects of the report for a more dispassionate grasp of market trends.

Gao Ting, UBS head of China strategy, forecast a moderate rise in China stocks this year, as optimism about economic recovery would be partly offset by tighter liquidity conditions.

“Profits at Chinese listed companies are expected to grow around 6 percent in 2017, which would underpin the stock market,” Gao said in a telephone interview on Tuesday.

“But liquidity will likely be a bit tighter, so there’s little chance of a lift in stock valuations.”

Gao expects the CSI300 to hit 3,750 this year - roughly 9 percent above the current level - and cyclical sectors and banking stocks would continue to benefit from the economic recovery.

Sector performance was mixed on Tuesday, with consumer stocks rising but coal miners dropping after the previous day’s rally.


The Hang Seng index added 0.4 percent, to 23,694.99 points, while the Hong Kong China Enterprises Index gained 0.6 percent, to 10,235.74.

Helping lift the market was a jump in mainland property plays.

The general mood remained cautious as expectations grew of a U.S. rate hike next week.

Reporting by Samuel Shen and John Ruwitch; Editing by Richard Borsuk

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below