China shares edge higher, Hong Kong slips in pre-holiday trade

Last Updated: Wed, Apr 03, 2013 11:00 hrs

* HSI -0.3 pct, H-shares -0.8 pct, CSI300 +0.2 pct

* Trading volume low ahead of 2-day holiday in China

* Respite for Chinese banks lifts A-share indexes

By Clement Tan

HONG KONG, April 3 (Reuters) - China shares were slightly higher at the midday break on Wednesday, as strength in the battered banking sector helped lift benchmark indexes off multi-week lows ahead of a two-day public holiday.

Hong Kong markets, which will also be shut on Thursday but resume trading on Friday, slipped with Chinese oil giants weaker on lower oil prices.

The CSI300 of the leading Shanghai and Shenzhen listings was up 0.2 percent from Tuesday's 2-1/2-month closing low. The Shanghai Composite Index rose 0.1 percent to 2,230.8, after earlier testing support at its 100-day moving average of about 2,221.8.

Both indexes have traded above that technical level since mid-December, which now served as key chart support. The Shanghai Composite has tumbled more than 8 percent and the CSI300 more than 10 percent from a Feb. 6 high.

The Hang Seng Index slipped 0.3 percent, while the China Enterprises Index of the top Chinese listings in Hong Kong fell 0.8 percent. Both went into the midday trading break well off the day's highs.

"It's rather quiet today partly because of the holiday tomorrow," said Jackson Wong, Tanrich Securities' vice-president for equity sales. "We need a catalyst to break out of the range-bound trade of the last two weeks."

That could come as soon as next week when China is due to start releasing a slew of monthly and quarterly economic data. March data for inflation data is due on April 9 and trade on April 10 with money supply expected between April 10 and 15.

First quarter GDP growth data is due on April 15 along with industrial output, retail sales and urban investment data for March. Data on Wednesday showed growth in China's services sector rose to multi-month highs in March.

On Wednesday, Chinese banks A-shares were among the leading index boosts. China Merchants Bank climbed 2 percent in Shanghai, further helped by news reports that Chinese regulators have approved its acquisition of a 50 percent stake in insurer CIGNA-CMC.

Shares of China Minsheng Bank rose 0.7 percent in Shanghai, but remained bounded in a range it has been trading in the last week after it tumbled 8.8 percent on March 28 after regulators announced a crackdown on financial risk.

Its Hong Kong listing is set for a third-straight loss, diving 2.2 percent to its lowest since Dec. 31.

The Chinese energy sector was broadly weak after Chinese media reported that fuel prices could fall next week with Brent crude slipping toward $110 a barrel on Wednesday, following the adoption of a new petroleum pricing framework announced last week.

In Hong Kong, CNOOC shed 1.1 percent to near a one-week low while PetroChina slid 0.8 percent.

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