April 25, 2019 / 4:47 AM / a year ago

China stocks slip on worries over pace of recovery

* SSEC, CSI300 both lost 0.7 pct; Hang Seng down 0.1 pct

* No plans to tighten or loosen monetary policy - cenbank

* Chinese economy still faces downward pressure - premier

HONG KONG, April 25 (Reuters) - Chinese stocks dropped on Thursday as officials warned of protracted pressure on economic growth, casting a shadow over hopes for a sustained and strong recovery. ** At the midday break, the Shanghai Composite index was down 0.7 percent at 3,178.95 points. The blue-chip CSI300 index slipped 0.7 percent. ** CSI300’s financial sector sub-index slid 0.3 percent, the consumer staples sector gained 0.1 percent, the real estate index was down 0.4 percent and the healthcare sub-index rose 0.6 percent. ** Chinese H-shares listed in Hong Kong fell 0.5 percent, while the Hang Seng Index was down 0.1 percent at 29,786.01 points. ** The smaller Shenzhen index dipped 0.1 percent and the start-up board ChiNext Composite index was weaker by 0.5 percent. ** The Chinese leadership is “keenly aware that China’s economy still faces downward pressure,” reiterating that Beijing will cut taxes to help businesses, state television quoted Premier Li Keqiang as saying on Wednesday. ** China’s central bank has no intent to tighten or relax monetary policy, a vice governor said on Thursday, adding that its use of reverse repos or a medium-term lending facility (MLF) does not signal it has a loosening bias. ** The comments came a day after the People’s Bank of China (PBOC) went for a targeted injection of funds in the markets on Wednesday, rather than more sweeping system-wide cash infusions, suggesting a weaker-than-expected stimulus. Government bond futures traded sharply lower on Wednesday. ** Reuters previously reported that the PBOC will likely pause to assess conditions before making any more bolder policy moves, amid better-than-expected growth data. ** “Given that the real economy has not completely stabilised, and that small and medium enterprises still face financing pressure, the probability of (the PBOC) tightening liquidity on the margins is relatively low,” Chuancai Securities’ analysts wrote in a memo on Thursday. ** The PBOC said on Thursday it will accelerate efforts to set up a policy framework to lower reserve requirement ratios (RRRs) for small- and medium-sized banks, according to state media. ** Around the region, MSCI’s Asia ex-Japan stock index was weaker by 0.3 percent, while Japan’s Nikkei index gained 0.3 percent. ** The largest percentage losses in the Shanghai index were Greattown Holdings Ltd, Liaoning Hongyang Energy Resource Invest Co Ltd and Shandong Huifa Foodstuff Co Ltd, all down by 10 percent. ** In Hong Kong, the sub-index of the Hang Seng index tracking energy shares dipped 0.3 percent, the IT sector fell 0.8 percent, financial stocks lost 0.2 percent, while property shares gained 0.9 percent. ** As of 0400 GMT, China’s A-shares were trading at a premium of 25.81 percent over the Hong Kong-listed H-shares. ** As of midday, the Shanghai stock index is above its 50-day and 200-day moving average.

Reporting by Noah Sin, Editing by Sherry Jacob-Phillips

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