December 23, 2019 / 4:24 AM / 7 months ago

China shares fall as tech stocks drag; Hong Kong inches up

* SSEC -0.5%, CSI300 -0.3%, HSI 0.1%

* HK->Shanghai Connect daily quota used 0.9%, Shanghai->HK daily quota used 1.7%

* FTSE China A50 -0.3%

SHANGHAI, Dec 23(Reuters) - China stocks started the week on a soft note on Monday, weighed down by a correction in tech shares after a state fund announced plans to cut its stakes in some of these companies, while focus remained on latest developments of the Sino-U.S. trade deal.

** The CSI300 index fell 0.3% to 4,006.35 at the end of the morning session, while the Shanghai Composite Index lost 0.5% to 2,990.71.

** The National Integrated Circuitry Investment Fund, also known as the “Big Fund”, planned to cut its stakes in Gigadevice Semiconductor, chipmaker Shenzhen Goodix Technology and Hunan Goke Microelectronics by about one percentage point each, according to those companies’ statements.

** The three stocks dropped after the state fund’s plan and the broad tech sector also came under pressure.

** The CSI IT index and CSI telecoms services index sank 1.4% and 1.5%, respectively.

** Foreigners have spent a record 190 billion yuan ($27.10 billion) via the Stock Connect so far in 2019 purchasing shares listed on the tech-heavy Shenzhen Stock Exchange.

** The strong gains in China’s growth stocks this year have more than factored in most of the expectations for their earnings in next two to three years, Luo Kun, analyst with Fortune Securities, wrote in a report.

** For the short-term, the A-share market is expected to consolidate recent gains while awaiting for new upward momentum following the Sino-U.S. trade deal, Luo added.

** Leading brokerage China Merchants Securities noted the state fund’s plan could dent market sentiment for the short-term, though China’s long-term support for tech sector will remain intact.

** Investors remained keen for more details of Sino-U.S. trade deal.

** U.S. President Donald Trump on Saturday said the United States and China would “very shortly” sign their so-called Phase One trade pact.

** On Friday, Trump spoke with Chinese President Xi Jinping and claimed progress on issues from trade to North Korea and Hong Kong, but China said Xi accused the United States of interfering in its internal affairs.

** China will lower tariffs on products ranging from frozen pork and avocado to some type of semiconductors next year, the finance ministry said, as Beijing looks to boost imports amid a slowing economy and a trade war with the United States.

** In Hong Knog, the Hang Seng index added 0.1% to 27,889.12, while the Hong Kong China Enterprises Index also gained 0.1% to 11,036.44.

** Hong Kong riot police pepper sprayed protesters to disperse crowds in the heart of the city’s financial district on Sunday after a largely peaceful rally in support of China’s ethnic Uighurs turned chaotic.

** President Xi Jinping said on Friday China would never allow foreign forces to interfere in its special regions, including Hong Kong, as he swore in a new pro-Beijing government for the gambling hub of Macau.

** Around the region, MSCI’s Asia ex-Japan stock index was weaker by 0.05% while Japan’s Nikkei index was up 0.08%.

** The yuan was quoted at 7.0133 per U.S. dollar, 0.1% weaker than the previous close of 7.0065.

** As of 0406 GMT, China’s A-shares were trading at a premium of 25.81% over the Hong Kong-listed H-shares. ($1 = 7.0103 Chinese yuan renminbi) (Reporting by Luoyan Liu and Brenda Goh; Editing by Rashmi Aich)

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