China shares climbed to three-month highs early Wednesday, as the shipping sector surged again after official media fanned hopes a draft of the policies on the Shanghai free-trade zone may be released this week.
Hong Kong markets were weaker, led by Apple Inc suppliers due to concerns the company's new low-cost model could still be too expensive for target consumers in emerging markets.
At midday, the Hang Seng Index was down 0.1 percent, while the China Enterprises Index of the top Chinese listings in Hong Kong shed 0.4 percent. Both indexes had been up earlier.
The CSI300 of the leading Shanghai and Shenzhen A-share listings rose 0.9 percent and the Shanghai Composite Index gained 0.6 percent. The indexes are at their highest levels since early June.
Shanghai volumes at midday were on track to match levels of the two previous days, which were the highest in nearly three years.
The higher volumes are "very significant," said Hong Hao, chief strategist at Bank of Communications International Securities in Hong Kong. "I think we are starting to see some rotation from the bond to the equity markets in the mainland."
Both onshore Chinese indexes have risen more than 9 percent since Aug. 23, a day after China's cabinet approved establishment of a free trade zone in Shanghai.
On Wednesday, the official Shanghai Securities News reported that a draft policy outlining financial and industrial reforms could be released this week.
China Shipping Container Lines (CSCL) soared by the 10 percent limit in Shanghai to its highest since April 20, 2012. Its A-share listing has surged nearly 60 percent since Aug. 23. On Wednesday, its H-share listing was flat.
China Shipbuilding Industry Co Ltd (CSIC), a key supplier to the People's Liberation Army, surged the maximum 10 percent limit in Shanghai after announcing plans to raise $1.4 billion through a private share sale to fund the expansion of China's military.
The Chinese shipping sector has also been bolstered by resurgent freight rates. The Baltic Dry Index is now at its highest since January 2012, having risen 36 percent this month.
Aluminum Corporation of China (Chalco) and other growth-sensitive materials counters joined the rally on Wednesday. Chalco surged 10 percent in Shanghai and 3.2 percent in Hong Kong.
Official data released after markets shut on Tuesday showed China's total social financing aggregate, a broad measure of liquidity in the economy, jumped to a four-month high in August.
Chinese data on August pointed to a firming economy, Premier Li Keqiang said on Tuesday, adding that the country will push ahead with interest rate reform and open its financial industry further.
But Apple suppliers dived after the U.S. technology giant launched two new iPhone models, sending its shares down 2 percent. AAC Technology tumbled nearly 6 percent after closing on Tuesday at its highest in more than three weeks.
China Mobile shares shed 1.4 percent. A deal allowing the country's largest mobile operator to carry iPhones on its networks is widely expected to be announced in coming days, but nothing came from a Beijing event shortly after two new iPhone models were unveiled in the U.S.