Web Sify
Follow us on
Mail
Print

China shares tick up on easing money rates; Hong Kong slides

Source : REUTERS
Last Updated: Wed, Feb 19, 2014 05:27 hrs
China shares tumble, U.S. downgrade accelerates derisking

Mainland stocks crept higher on Wednesday, as a fall in money market rates eased concern over monetary tightening, while Hong Kong shares slipped on profit-taking.

The Shanghai Composite Index was up 0.6 percent at midday, while the Hang Seng Index fell 0.2 percent.

Shanghai shares eased off a two-month high on Tuesday after China's central bank drained cash from the banking system through open market operations for the first time in eight months.

But the overnight cash rate fell to its lowest level since May on Wednesday, indicating that liquidity remains ample, at least for the moment.

On the mainland, energy stocks outperformed, with the energy sub-index gaining 1.21 percent, boosted by China Shenhua Energy Corp, which gained 1.4 percent after it announced that coal production rose 18 percent year-on-year in January.

China Citic Bank Corp provided the biggest boost to the Shanghai index, adding 7.5 percent after reporting net profit growth of 26 percent in 2013. Citic's Hong Kong shares gained 3.7 percent.

UNCERTAINTY

Hong Kong stocks edged lower on Wednesday as investors took profit on cyclical stocks and waited on the sidelines ahead of a China manufacturing survey, the HSBC China flash purchasing manager's index (PMI), due to be released on Thursday.

Jackson Wong, Tanrich Securities' vice-president for equity sales, said one factor fuelling the profit-taking in cyclical stocks was uncertainty over the economy's direction ahead of the annual meeting of China's parliament in March.

"Since we have a bounce back from the low of last week to the current level, a lot of profit-taking is going on, we are lacking some good news to propel the market towards further upside," Wong said.

The China Enterprise Index of mainland firms listed in Hong Kong fell 0.45 percent.

China's recent macro-economic data has painted a mixed picture, with strong trade and bank lending figures suggesting resilient growth, while the PMI for January was the weakest in six months.

Shares in China's Dongfeng Motor Group Co fell 0.9 percent after the company said it will invest 800 million euros ($1.10 billion) in French carmaker Peugeot SA PEUP.PA via a share sale and rights issue, which France's government will match.


More from Sify:
blog comments powered by Disqus
most popular on facebook
talking point on sify finance