July 20, 2016 / 4:26 AM / 2 years ago

China stocks flat at midday as investors await policy leads

* CSI300 flat, SSEC flat, HSI +0.8 pct

* Finance shares fall on profit taking, volumes weak

* Analysts say market in holding pattern around 3,000

By Nathaniel Taplin

SHANGHAI, July 20 (Reuters) - China stocks were flat on Wednesday amid weak trading volumes as investors sought leads from economic data about possible policy direction in the mainland.

The CSI300 index was unchanged at 3,247.90 points at the end of the morning session, while the Shanghai Composite Index was also unchanged at 3,035.87 points.

Finance shares were lower but real estate shares including Vanke, currently embroiled in a hostile takeover battle, rose. The CSI300 financial sub-index was down 0.2 percent, while the Shanghai Composite property sub-index was up 0.1 percent.

Analysts say equities are stuck in a holding pattern as the market awaits more information following a series of mixed economic indicators released over the past week on growth, inflation and housing. The next possible clues about the economic outlook may come from the Purchasing Managers’ Indexes, due Aug. 1.

“I think it’s normal, there’s been some recent data releases including inflation, and there’s also the Vanke situation which is naturally impacting the market a bit,” said Zhang Qi, analyst at Haitong Securities in Shanghai.

“You’ve also seen banking shares do relatively well recently, so it’s not a surprise to see a bit of a pull back.”

Volumes were weak for the second day in a row, with the total volume of A shares traded in Shanghai at 7.01 billion shares. Volumes in Shenzhen were 11.03 billion shares.

Analysts say that the Shanghai Composite will struggle to break much above 3,000 without some strong signs of fundamental improvements in economy or earnings.

China CSI300 stock index futures for August rose 0.2 percent, to 3,211, -36.90 points below the current value of the underlying index.

The Hang Seng index added 0.8 percent, to 21,838.67 points. Analysts say Hong Kong equities continue to benefit from dovish central bank signals worldwide. The index had its best week in over a year last week.

The Hong Kong China Enterprises Index gained 0.5 percent, to 9,034.08.

Editing by Sam Holmes

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