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Chinese stocks edged higher at midday on Wednesday, with strong gains for banking shares outweighing falls for manufacturing counters.
The CSI300 index rose 0.4 per cent to 3,527.32 points at the end of the morning session. The Shanghai Composite Index was also up 0.4 per cent at 3,247.35 points.
In Hong Kong, the Hang Seng index added 0.2 per cent to 24,271.10 points. The Hong Kong China Enterprises Index gained 0.6 per cent to 12,133.50.
The mainland bank index rose nearly 2 per cent.
“Bank shares are still relatively undervalued and have the potential to continue rising so they are likely to further rebound,’’ said Tian Weidong, an analyst for Kaiyuan Securities in Xi'an.
Top CSI300 manufacturing index drags included Midea Group, a household electronics manufacturer, which dropped 2.17 per cent and Yili Industrial Group, a dairy manufacturer, which fell 1.73 per cent.
Yashili International Holdings, a unit of China Mengniu Dairy Co Ltd, dropped 5.7 per cent on Wednesday after the Chinese milk powder maker warned that its 2014 annual profit was expected to fall about 40 per cent.
Prices of milk powder halved in 2014, according to the US Department of Agriculture, and dairy manufacturers have been caught off guard by decreased demand.
China CSI300 stock index futures for January rose 0.5 per cent to 3,536.2, 8.88 points above the current value of the underlying index.
The index measuring price differences between dual-listed companies in Shanghai and Hong Kong stood at 126.88.
A value above 100 indicates Shanghai shares are pricing at a premium to shares in the same company trading in Hong Kong.
Total volume of A shares traded in Shanghai was 12.93 billion shares, while Shenzhen volume was 6.54 billion shares.
Total trading volume of companies included in the HSI index was 0.7 billion shares.
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