China stocks flat as data shows economy stabilizes; Hong Kong shares slip

Source : REUTERS
Last Updated: Wed, Oct 19, 2016 12:39 hrs
Asia shares

China stocks were little changed on Wednesday morning after fresh data showed the Chinese economy is stabilizing, as expected, while Hong Kong shares gave up a bit of the previous session's sharp gains.

Both the CSI300 index and the Shanghai Composite Index ended the morning session up 0.1 percent, at 3,322.93 points and 3,087.54 points, respectively.

There was little surprise from China's third quarter gross domestic product (GDP) data. The economy grew 6.7 percent from a year earlier, steady from the previous quarter, as increased government spending and a property boom offset stubbornly weak exports.

"The upshot from today's data is that economic activity seems to be holding up reasonably well, with few signs that a renewed slowdown is just around the corner," wrote Julian Evans-Pritchard, China economist at Capital Economics.

Still, he said, "as the boost from policy stimulus begins to wear off, probably at some point early next year, continued structural drags mean the economy is set to begin slowing again."

Investors continue to focus on companies likely benefit to from Beijing's structural and state-owned enterprise (SOE) reforms.

An index that tracks China's non-ferrous metal producers rose after Beijing said it would strictly control the expansion of the industry, encourage continued consolidation and boost proven ore reserves by 2020.

Coal miners, including Yanzhou Coal Mining and Xishan Coal jumped as futures contracts of coal and coking coal continue to rise on the back of China's push to reduce coal producing capacity.

SOE reform remains a strong investment theme, with major carriers, including China Eastern Airlines, China Southern Airlines and Air China, all rising sharply, after China set up a body to oversee the aviation supply sector as part of ongoing reforms.

In Hong Kong, the Hang Seng index dipped 0.1 percent, to 23,365.33 points, while the Hong Kong China Enterprises Index lost 0.3 percent, to 9,690.75.

Sector performance was mixed in Hong Kong, with energy and industrial stocks falling but telecom and utility stocks rising.

More from Sify: