* HSI flat, H-shares -0.4 pct, CSI300 -0.6 pct
* Shanghai volume at 2013 low, HK turnover below average
* Want Want China margins at risk from higher inflation
* Daqin Railway boosted by China railway ministry breakup
By Clement Tan
HONG KONG, March 11 (Reuters) - China shares posted a
third-straight daily loss in weak Monday trading, flattening
Hong Kong gains, after patchy economic data over the weekend
spawned doubts that earnings will recover for Chinese companies.
A flight to earnings safety prodded shares of Asia's
third-largest insurer AIA Group to a record closing
high in Hong Kong, where a litany of Chinese companies warned of
declining profits over the weekend.
In the mainland, the CSI300 of the leading
Shanghai and Shenzhen A-share listings ended down 0.6 percent,
while the Shanghai Composite Index slipped 0.4 percent
in the weakest bourse volume since Christmas Eve.
The Hang Seng Index closed flat, surrendering gains
it had at midday. The China Enterprises Index of the top
Chinese listings in Hong Kong shed 0.4 percent. Turnover ranked
fifth-lowest this year and was some 13 percent below its 20-day
Official data over the weekend showed China's consumer
prices rose 3.2 percent in February from a year ago, the fastest
pace in 10 months, while industrial production growth in the
first two months of 2013 was the lowest since October 2012 - the
starting point of China's nascent economic recovery.
"It's still premature to predict what the central bank will
do with this set of data, but it's difficult to draw any
positive conclusions," said Hong Hao, chief equity strategist at
Bank of Communication International Securities.
In a report dated last Friday, Citi strategists cited data
provider EPFR as saying that China equity funds had a net
outflow of $56 million in the week that ended March 6. That was
the second straight period of net outflows after 24 consecutive
weeks of inflows, according to the data.
Hong said he is still advising clients not to take excessive
risk at present.
"We now know that both economic growth and the equities
rally in December and January were driven by liquidity, we now
need to see easier monetary policy converted into some kind of
growth in the next few months," he said.
Illustrating concern about inflation cutting into margins,
shares of snack maker Want Want China dived 4.3
percent from Friday's record closing high in Hong Kong, cutting
the year's gains to 8.4 percent.
Insurer AIA, though, climbed 1.6 percent to lift gains in
2013 to 13.6 percent. The Hang Seng Index is up 1.9 percent,
while the China Enterprises Index is flat on the year.
Yurun Food, one of a series of Hong Kong-listed
companies that over the weekend warned of declining
profitability, tumbled 7 percent to close at its lowest since
NATIONAL PEOPLE'S CONGRESS MOVES
Mid-sized lenders were among the biggest drags on mainland
benchmark indexes. China Minsheng Bank fell 3.2
percent from Friday's one-month closing high in Shanghai.
Industrial Bank was also down 3.2 percent.
The banking sector was further hurt by a China Business News
report that quoted a vice director of the Chinese banking
regulator as saying there are no plans to change the current 75
percent loan-to-deposit ratio cap.
Comments from regulators at the National People's Congress
last week had raised hopes of a policy change. On Monday, China
Business News reported the official as also saying any rule
adjustments would be aimed at containing risk.
Daqin Railway climbed 1.2 percent in Shanghai
following Being's announcement over the weekend about dissolving
the railway ministry as part of a broader government
Brokerage CICC expects Daqin could be the most sensitive to
any tariff hikes emanating from an asset revaluation, with
pricing reform seen the initial focus after the formation of the
China Railway Corporation to run the ministry's commercial