China brokerage shares rise as futures rules relaxed, but China, HK indexes fall

Last Updated: Fri, Feb 17, 2017 10:20 hrs

* SSEC -0.5 pct, CSI300 -0.2 pct, HSI -0.4 pct

* China relaxes trading rules on stock index futures

* HK stocks slide after closing at 18-month highs on Thursday

SHANGHAI, Feb 17 (Reuters) - Benchmark stock indexes in China and Hong Kong fell on Friday as investors took profits on resources shares, but losses were checked by strength in Chinese brokerage shares after authorities relaxed some rules on stock index futures trading.

China's blue-chip CSI300 index fell 0.2 percent to 3,433.19 points at the end of the morning session, while the Shanghai Composite Index lost 0.5 percent to 3,214.62.

For the week, the indexes looked set to rise 0.6 percent, with market turnover gradually picking up to the highest since the week before the Christmas holiday.

"The market was relatively stable today, and brokerage plays were boosted by eased rules on stock index futures," Zhang Qi, a Shanghai-based analyst with Haitong Securities.

But Zhang cautioned that some financial stocks were driven by speculators and their strength could be short-lived.

China's securities regulator said late on Thursday it will relax certain rules on stock index futures trading as the government starts to gradually unwind restrictions imposed during the 2015 stock market meltdown that brought trading to almost a halt.

An index tracking brokerages rallied 3 percent in early trade but then slid to 0.9 percent at midday.

Central China Securities Co Ltd, Pacific Securities Co Ltd and China Galaxy Securities Co Ltd all jumped 10 percent at one point, the maximum allowed.

"Capital in the market is not enough to support a board-based rally, so sectors are taking turns to rise, based on what's the hottest topic that day," Zhang said.

Most sectors lost ground in China, but wine makers made solid performance, with a gauge of the liquor industry advanced 1.3 percent, hitting a seven-month high.

A gauge of non-ferrous metal firms shed 1.1 percent and an index tracking coal miners lost 2 percent, after a year-long rally in resources shares.

Hong Kong stocks fell on profit-taking after the main index settled at an 18-month high in the previous session.

The benchmark Hang Seng index dropped 0.4 percent, to 24,011.26, while the Hong Kong China Enterprises Index lost 0.8 percent to 10,366.76.

The main index has gained 1.9 percent so far this week.

Nearly all sectors in Hong Kong fell by the lunch break, but tech stocks ticked up 0.1 percent as index heavyweight Tencent Holdings Ltd advanced slightly.

(Reporting by Jackie Cai and John Ruwitch; Editing by Kim Coghill)

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