China and Hong Kong stocks showed some signs of stabilisation on Thursday morning after recent sharp falls eased the selling pressure and on demand for selected blue-chips.
“The market was more stable after it slumped so heavily of late,’’ said Liu Jingde, an analyst at Cinda Securities in Beijing.
“The main reason may be some blue-chip stocks were supporting the market, capping the indexes’ falls.’’
The CSI300 index edged down 0.3 per cent to 2,922.14 points by midday, while the Shanghai Composite Index lost 0.5 per cent to 2,722.55 points.
The Hang Seng index was unchanged at 19,061.00 points, while the Hong Kong China Enterprises Index gained 0.2 per cent to 7,976.76.
The index measuring price differences between dual-listed companies in Shanghai and Hong Kong stood at 136.89, dropping 0.8 per cent, indicating a narrowing of the premium of Shanghai share prices versus Hong Kong’s.
The northbound quota for the Hong Kong-Shanghai Stock Connect, currently set at 13 billion yuan, saw net inflows of 0.08 billion yuan, indicating some bargain-hunting in Shanghai after the recent sell-off.
Traders said one morning’s bargain-hunting could not be interpreted as a trend.
An earlier report showed that Chinese stock investors were finally seeing value in domestic shares, but instead of wading back into battered onshore exchanges, they had mainly gone shopping for bargains in Hong Kong.
Nanjing Xinjiekou Department Store Co was one of Thursday’s biggest losers in the Shanghai market, hitting its 10-per cent daily limit-down to trade at 30.4 yuan by midday.
The company’s shares resumed trading on Wednesday after being suspended for about half a year due to corporate restructuring. While the restructuring was seen as positive for the company, its share price was catching up with the market's losses during its suspension, traders said.
The Shanghai Composite Index had slumped 6.4 per cent on Tuesday and tumbled another 4 per cent in intraday trading on Wednesday, before suspected government fund support enabled the market to trim losses to close down 0.5 per cent.
Chinese stocks have been persistently weak since June, under pressure from rich valuations and worries over the negative impact from the government’s clamp down on irregular market practices.