China stocks flat at midday; Hong Kong gains 0.2%

Chinese stocks took a breather on Tuesday morning and were flat after strong gains on Monday, as the central bank took steps to stabilise the yuan, and as the news of US and Mexico agreeing to overhaul a trade pact brought relief to the region.

China's central bank raised its daily guidance rate for the yuan by the most in nearly 15 months on Tuesday as part of its latest move to put a floor under the currency.

China's state planner had said on Monday that the country's investment growth, already at record lows, may weaken even further in the future and authorities should step up fiscal and financial measures to give it a boost.

The US Commerce Department had said on Monday it had made a preliminary determination that imports of certain steel wheels from China were subsidised, and that it would impose duties.

US-Mexico trade deal

The United States and Mexico had agreed on Monday to overhaul the North American Free Trade Agreement (NAFTA), putting pressure on Canada to agree to new terms on auto trade and dispute settlement rules to remain part of the three-nation pact.

At the midday break, the Shanghai Composite index was almost unchanged 2,780.98. China's blue-chip CSI300 index was down less than 0.1 per cent, with its financial sector sub-index lower by 0.29 per cent, the consumer staples sector down 0.94 per cent, the real estate index up 0.19 per cent and the healthcare sub-index down 0.26 per cent.

Chinese H-shares listed in Hong Kong rose 0.25 per cent to 11,076.46, while the Hang Seng Index was up 0.24 per cent at 28,340.20. The smaller Shenzhen index was unchanged for the day and the start-up board ChiNext Composite index was weaker by 0.13 per cent.

Around the region, MSCI's Asia ex-Japan stock index was firmer by 0.46 per cent, while Japan's Nikkei index was up 0.48 per cent. The yuan was quoted at 6.818 per US dollar, 0.03 per cent weaker than the previous close of 6.816.

Largest percentage gainers in the main Shanghai Composite index were Shijiazhuang Kelin Electric Co Ltd, up 10.03 per cent, followed by SEC Electric Machinery Co Ltd , gaining 10.02 per cent and Huada Automotive Technology Co Ltd, up by 10.01 per cent.

Largest percentage losses in the Shanghai index were Shenzhen Geoway Co Ltd, down 10.06 per cent, followed by Shangying Global Co Ltd, losing 9.33 per cent and Fujian Longma Environmental Sanitation Equipment Co Ltd , down by 8.19 per cent.

So far this year, the Shanghai stock index is down 15.91 per cent, while China's H-share index is down 5.6 per cent. Shanghai stocks have declined 3.32 per cent this month.

Top gainers among H-shares were Shenzhou International Group Holdings Ltd, up 6.65 per cent, followed by Sinopharm Group Co Ltd, gaining 5.84 per cent and China Shenhua Energy Co Ltd, up by 3.28 per cent.

The three biggest H-shares percentage decliners were ZhongAn Online P & C Insurance Co Ltd, which has fallen 5.39 per cent, China Gas Holdings Ltd, which has lost 2.1 per cent and Anhui Conch Cement Co Ltd, down by 1.3 per cent.

About 7.29 billion shares have traded so far on the Shanghai exchange, roughly 54.3 percent of the market's 30-day moving average of 13.43 billion shares a day. The volume traded was 13.28 billion as of the last full trading day.

At midday, China's A-shares were trading at a premium of 17.47 per cent over Hong Kong-listed H-shares. The Shanghai stock index is below its 50-day moving average and below its 200-day moving average.

The price-to-earnings ratio of the Shanghai index was 12 as of the last full trading day, while the dividend yield was 2.7 per cent. So far this week, the market capitalisation of the Shanghai stock index has risen by 1.88 per cent to 29.60 trillion yuan.

In Hong Kong, the sub-index of the Hang Seng index tracking energy shares rose 0.5 per cent, while the IT sector rose 0.6 per cent. The top gainer on Hang Seng was Want Want China Holdings Ltd, up 3.3 per cent, while the biggest loser was Country Garden Holdings Co Ltd, which was down 3.29 per cent.

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