China stocks rebound on trade hopes, property data

China stocks rebounded on Thursday morning after China delivered a written response to US trade demands, lifting hopes for a resumption of negotiations, and as property firms gained after data showed new home prices rose in October.

At the midday break, the Shanghai Composite index was up 18.27 points, or 0.69 per cent, at 2,650.51. China's blue-chip CSI300 index was up 0.49 per cent, with its financial sector sub-index higher by 0.83 percent, the consumer staples sector up 0.41 per cent and the healthcare sub-index down 0.42 per cent.

China has delivered a written response to US demands for wide-ranging trade reforms in a move that could trigger negotiations to bring an end to a withering trade war between the world's top economies.

A sub-index tracking real estate firms gained 0.43 per cent as new data showed that average new home prices in China's 70 major cities rose 1.0 per cent in October despite slowing investment, led by gains in smaller cities.

But a Reuters analysis of the earnings of 1,950 firms listed in Shanghai and Shenzhen showed that they managed a combined net profit rise of just 3.9 per cent in the third quarter, compared with jumps of 20-55 per cent seen in each quarter for the past two years in a warning sign for economic growth.

Energy firms remained subdued amid weak oil prices. A sub-index tracking the sector was 0.09 per cent lower at midday. Chinese H-shares listed in Hong Kong rose 0.24 per cent to 10,430.65, while the Hang Seng Index was up 0.42 per cent at 25,760.92.

An index in Hong Kong tracking IT companies jumped 2.5 per cent, led by Tencent Holdings Ltd, which gained 3.75 per cent after posting above-forecast third-quarter profits. The smaller Shenzhen index was up 0.47 per cent and the start-up board ChiNext Composite index was higher by 0.35 per cent.

Around the region, MSCI's Asia ex-Japan stock index was firmer by 0.31 per cent, while Japan's Nikkei index was down 0.74 per cent. The yuan was quoted at 6.9401 per U.S. dollar, 0.14 per cent firmer than the previous close of 6.95.

Largest percentage gainers in the main Shanghai Composite index were Shanghai Shibei Hi-Tech Co Ltd, up 10.04 per cent, followed by Pci-Suntek Technology Co Ltd, gaining 10.03 per cent and Jiangxi Hongdu Aviation Industry Co Ltd, up by 10.02 per cent.

Largest percentage losers in the Shanghai index were Shanghai Sunglow Packaging Technology Co Ltd Co Ltd, down 10.01 per cent, followed by Nanjing Chixia Development Co Ltd, losing 5.21 per cent and Harbin Gong Da High-Tech Enterprise Development Co Ltd, down by 5.11 per cent.

So far this year, the Shanghai stock index is down 20.41 per cent, while China's H-share index is down 11.1 per cent. Shanghai stocks have risen 1.13 per cent this month. Tencent led gains on the Hang Seng and was also the biggest gainer among H-shares, followed by China Huarong Asset Management Co Ltd, gaining 2.65 per cent and CITIC Securities Co Ltd, up by 2.11 per cent.

The biggest loser on the Hang Seng index was Sino Biopharmaceutical Ltd, which was down 5.70 per cent. The three biggest H-shares percentage decliners were CSPC Pharmaceutical Group Ltd, which has fallen 4.97 per cent, Air China Ltd, which has lost 2.1 per cent and Great Wall Motor Co Ltd, down by 1.7 per cent.

About 11.63 billion shares have traded so far on the Shanghai exchange, roughly 70.8 per cent of the market's 30-day moving average of 16.43 billion shares a day. The volume traded was 23.84 billion as of the last full trading day.

As of 04:20 GMT, China's A-shares were trading at a premium of 18.24 per cent over the 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 10.97 as of the last full trading day, while the dividend yield was 2.9 per cent. So far this week, the market capitalisation of the Shanghai stock index has risen by 1.29 per cent to 28.16 trillion yuan.