* HSI -0.1 pct, H-shares -0.3 pct, CSI300 +0.4 pct
* HSI fails at 23,708 chart resistance in early trade
* AIA bucks trend as investors opt for earnings safety
* Li Ning slammed by renewed inventory woes
By Clement Tan
HONG KONG, Jan 23 (Reuters) - Hong Kong shares slipped on
Wednesday as investors took profits on growth-sensitive
outperformers after benchmark indexes faltered at chart
resistance levels after a strong start to the year.
The Hang Seng Index ended down 0.1 percent at
23,635.1 points, after failing to hold above chart resistance at
about 23,708, the high on May 31 and June 1, 2011. The benchmark
had closed on Tuesday at its highest since those dates.
The China Enterprises Index of the top Chinese
listings in Hong Kong 0.3 percent as bourse turnover hit its
highest in almost two weeks.
In mainland China markets, the CSI300 of the top
Shanghai and Shenzhen A-share listings rose 0.4 percent, while
the Shanghai Composite Index gained 0.3 percent. Both
reversed midday losses to close near 7-1/2 month highs.
The indexes have bounced 24 and 18 percent, respectively,
from a Dec 3 low as investors grow more convinced that China's
economy is regaining momentum. The Hang Seng and China
Enterprises indexes have rallied about 9 and 16 percent,
respectively, over the same time period.
"We have risen by quite a bit in a very short time, so
investors have been taking some profits in the last week or so,
looking for new ideas to rotate into," said Larry Jiang, chief
strategist at Guotai Junan International Securities.
On Wednesday, shares of Chinese sportswear brand Li Ning
tumbled 5.3 percent after a Hong Kong media report
said the sector still faces inventory issues, slipping further
from Monday's near 9-month closing high.
The report said one outlet was selling items with discounts
of up to 90 percent. Despite a second-straight loss on
Wednesday, Li Ning shares are still up almost 69 percent from a
Sept. 5 low.
Chinese railway counters were also weak. China Railway
Construction (CRC) and China Railway Group
(CRG) both posted their sixth-straight
loss. They started 2013 where they left off in 2012, but losses
in the last week have prodded them into negative territory for
In Hong Kong, CRC dived 3.5 percent, while CRG shed 1.6
percent to its respective lowest close since late November. In
Shanghai, CRC shed 2.4 percent while CRG slid 0.9 percent.
But there were still gains in growth-sensitive sectors, with
leading players expected to benefit from an acceleration in
mergers and acquisitions in nine industries, including steel and
rare earths. China's top economic planning agency had issued
guidance on sector consolidation on Tuesday.
Angang Steel rose 1.8 percent in Hong
Kong and 1.2 percent in Shenzhen, while Inner Mongolia Baotou
Steel Rare-earth Group climbed 2.1 percent in
EARNINGS SAFETY FIRST
Investors also rotated into defensives and laggards which
are unlikely to disappoint in the upcoming earnings reporting
season, as profit warnings start to accumulate.
Asian insurer AIA Group continued its bounce from
Monday's one-month low, rising 1.8 percent. Goldman Sachs said
in a note dated Jan 23 that strong sales in Thailand in the last
quarter could help AIA trump profit expectations.
Over the last 30 days, two out of 20 analysts following the
stock have upgraded their earnings-per-share estimates for AIA
by an average of 4.8 percent, according to Thomson Reuters
China Minsheng Bank extended gains
after advising over the weekend of a better-than-expected 34.5
percent rise in full year 2012 net profit. Its shares jumped 3
percent in Hong Kong, while spiking 3.6 percent in Shanghai.