* CSI300 -1.7 pct; SSEC -1.6 pct; HSI -0.9 pct
* SSEC approaches the ceiling of the Bollinger band
* China Feb exports tumble the most in over 6 years
SHANGHAI, March 8 (Reuters) - China stocks, which rose the past five sessions, sagged on Tuesday morning as investors took profit from the recent rally.
Hong Kong shares were also soft, as investors’ mood in Asian markets turned cautious in the wake of a month-long rally.
China’s blue-chip CSI300 index was down 1.7 percent, to 3,052.33 points at the lunch break, while the Shanghai Composite Index lost 1.6 percent, to 2,850.33 points.
The Shanghai Composite gained nearly 8 percent during the five-day winning streak, but with the gauge approaching the ceiling of the Bollinger band - a widely watched indicator of resistance - some investors started to unwind their positions.
“Don’t forget the backdrop of the rebound is a bear market, so after solid gains, it’s natural for investors to take profit,” said Zhang Xiaochun, strategist at Guolian Securities.
In mid-morning, China issued data showing February trade performance was much worse than economists expected, with exports tumbling the most in over six years, but that did not pull down Chinese market indexes.
Concerns over rapid yuan depreciation and China’s capital outflows subsided after data released late on Monday showed the country’s foreign exchange reserves fell $28.57 billion in February, less than expected and easing from January’s slump.
Zhang added that news flows from the Chinese parliament meeting signals little chance of massive stimulus, and with a tentative property market recovery and gold diverting liquidity from the stock market, “the rally is hardly sustainable”.
A Shenzhen-listed gold exchange-traded fund run by E Fund Management Co had doubled in size over the past two weeks, underscoring strong Chinese interest in perceived safe haven assets despite the equity rebound.
The banking and property sector dropped about 2 percent, amid signs that Beijing is increasingly concerned about rapid home price gains in several major cities recently.
People’s Bank of China Vice Governor Chen Yulu said China’s central bank will strengthen its supervision of real estate financing to promote healthy development of the property market.
The start-up board slumped over 4 percent at one stage but ended morning trade up 0.2 percent in a dramatic reversal.
In Hong Kong, the Hang Seng index dropped 0.9 percent, to 19,975.87 points, while the Hong Kong China Enterprises Index lost 2.0 percent, to 8,456.83.
All main sectors fell in the city, with the service and energy sector leading the decline.
Reporting by Samuel Shen and Nathaniel Taplin; Editing by Richard Borsuk