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China stocks dip ahead of July data deluge; Hong Kong up

China stocks dip ahead of July data deluge; Hong Kong up

SHANGHAI:  China stocks fell slightly on Monday as losses in energy and utilities offset gains in technology firms, but many investors were reluctant to stake out fresh positions as they awaited a flurry of data in the next two weeks. The CSI300 index fell 0.1 percent to 3,703.63 points by the end of the morning session, while the Shanghai Composite Index lost 0.2 percent to 3,256.68. Signalling expectations of further weakness, China CSI300 stock index futures for August fell 0.4 percent to 3,690.8, 12.8 points below the current value of the underlying index. “A-shares are in a period of stability, with the Shanghai index likely to fluctuate around the 3,300 level,” said Zhang Gang, an analyst at Central China Securities in Shanghai. “The market is still waiting for an opportunity to break out.”

China will kick off its July economic reports with foreign exchange reserves later on Monday, trade on Tuesday and inflation on Wednesday. Bank lending numbers could come later this week while industrial output, retail sales and investment readings will be released next Monday. Analysts expect the data to show China carried solid growth momentum into the third quarter which will likely encourage authorities to maintain a tighter policy stance and continue with their clampdown on riskier types of financing which has periodically rattled stock markets. Shares of some building materials firms extended gains as a year-long construction boom showed few signs of flagging. Baoshan Iron & Steel, China’s largest steelmaker, rose 5.1 percent to 8.51 yuan, its highest in more than two years. But Jiangxi Copper, China’s largest integrated copper producer, fell 3.1 percent on profit taking, even as Shanghai copper prices flirted with four-year highs . Jiangxi Copper has gained 29.3 percent since May 11.

SAIC Motor Corp shrugged off news over the weekend that SAIC General Motors, its joint venture with General Motors Co would recall 6,451 Buick GL8 minivans in China. The company’s shares were up 0.6 by midday. Healthcare and technology shares were overall the biggest winners in the morning session. The tech-heavy start-up board index ChiNext, which fell 4.5 percent in July, gained 0.7 percent to 1,732.06. Stocks in Hong Kong also rose as global equities were supported by a strong performance on Wall Street on Friday. The Hang Seng index added 0.4 percent to 27,666.15 points. The Hong Kong China Enterprises Index gained 0.3 percent to 11,040.23. Gains in Hong Kong were led by the technology sector. Tencent Holdings jumped 2.7 percent to HK$319.80, a new all-time high.