🎁 💸 Warren Buffett's Top Picks Are Up +49.1%. Copy Them to Your Watchlist – For FreeCopy Portfolio

Profit-taking pulls China stocks from 2011 high; Hong Kong takes a breather

Published 04/11/2011, 05:41 AM
Updated 04/11/2011, 05:48 AM
NDX
-
UK100
-
JP225
-
HK50
-
BAER
-
0857
-
GC
-
FTNMX551030
-
BMAh
-

* Hang Seng slips 0.4 percent, Shanghai down 0.2 percent

* Profit-taking pulls down financial stocks, commodity stocks gain

* Foreign investors continue to pour money into North Asia (Updates to close)

By Vikram Subhedar and Yixin Chen

HONG KONG/SHANGHAI, April 11 (Reuters) - Chinese shares flirted with their highest levels of the year on Monday, buoyed by surging commodities companies, before profit-taking in financial and property stocks pulled down benchmark indexes in Shanghai and Hong Kong.

Banking shares, which carry the biggest sector weighting on the China and Hong Kong markets and had seen heavy buying in the run up to earnings reporting season, were broadly weaker.

"Some of the euphoria surrounding banks seems to have calmed down a bit," said Christian Keilland, head of Asian trading at BTIG in Hong Kong.

"But at this stage I'd say a pull back is healthy," he added.

Hong Kong's Hang Seng index , which had climbed 5 percent in the past month, ended 0.4 percent lower at 24,303.07 points while Shanghai's key stock index closed down 0.2 percent at 3,022.7, after having risen as much as 0.8 percent during the session to a 2011 high.

Chinese shares have seen a steady rise in fund inflows interest as attractive valuations and a healthy economy revived foreign investor interest. The Shanghai Composite and the Hang Seng are Asia's top performing benchmarks this year with gains of 7.6 percent and 5.5 percent, respectively.

While strong earnings backed the view that banks were good bets, the rally had taken shares into technically overbought territory, suggesting some consolidation around current levels was possible.

Still, other sectors could pick up the slack analysts say.

Resource counters, helped by resilient commodity prices, helped the China Enterprise Index of top Hong Kong-listed mainland firms rise 0.2 percent in a flat market.

Petrochina rose 2.8 percent while gold mining company Zijin Mining rose 2.6 percent as the precious metal hit a fresh record high. [ID:nL3E7FB0ME]

Foreign investors with a preference for North Asian markets were pouring money into Hong Kong and a weaker yen has now revived the carry trade -- which involves using low-yielding currencies to buy higher-yielding assets, said Alan Lam, Greater China analyst at Julius Baer in Hong Kong.

They poured in more than $1 billion into Asian markets outside of Japan in the week ended April 6, data from fund tracker EPFR Global shows. That was the highest in 20 weeks, according to EPFR.

CHINA EASES, PROPERTY DOWN

Chinese property shares brought the mainland's index down after Chinese Premier Wen Jiabao said the country must strengthen regulation and control the red-hot real estate market.

"Small caps already faced strong pressure to fall and properties were also weighed down by Wen's comments. These clamped down on the index today," said Cheng Yi, an analyst at Zheshan Securities in Shanghai.

"After the 4-day rise, the index really needs to correct."

The sub-index of property issues tumbled 1.3 percent. Vanke , the country's largest developer dropped 3.6 percent, while Beijing Urban Construction Investment & Development , tumbled 6.3 percent.

The sub-index of small shares of the Shanghai and Shenzhen market fell 0.8 percent.

But steel makers outperformed, with analysts saying that investors were upbeat that steel demand would be large in April following the earthquake in Japan.

Inner Mongolia Baotou Steel Union , the most active share on the Shanghai market, jumped 6.1 percent, while Hebei Iron and Steel Co , the most active on the Shenzhen market, rallied its 10 percent daily limit.

Pan Asia..... Japan........ S.Korea.... S.E. Asia........... Hong Kong... Taiwan..... Australia/NZ........ India....... China......

OTHER MARKETS: Wall Street.......... Gold......... Currency.. Eurostocks.......... Oil........... JP bonds... ADR Report......... LME metals.. US bonds... Stocks News US.. Stocks News Europe... DIARIES & DATA: IPO diary & data Asia earnings diary U.S. earnings diary European diary Taiwan diary Wall Street Week Ahead Eurostocks Week Ahead World forecasts

TOP NEWS: For top Asian company news, double click on: U.S. company news European company news Forex news Global Economy news Technology news Telecoms news Media news Banking news Politics/General news Asia Macro data A multimedia version of Reuters Top News is available at: http://topnews.session.rservices.com

LIVE PRICES & DATA: World Stocks <0#.INDEX> Currency rates Dow Jones/NASDAQ Nikkei FTSE 100 Debt <0#USBMK=> Hong Kong Dollar LME price overview (Editing by Chris Lewis and Ramya Venugopal)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.