Hong Kong stocks rebound on strong resources; China sluggish on debt woes

Lee & Man Paper Manufacturing

24/01/2017 04:18

* SSEC +0.1 pct, CSI300 flat, HSI +0.3 pct 
    * Dollar struggles, pressured by concerns of US 
protectionism 
 
    SHANGHAI, Jan 24 (Reuters) - Hong Kong stocks rose on 
Tuesday morning thanks to strength in resources shares as U.S 
President Donald Trump's trade protectionist stance dented the 
dollar and tempered concerns over capital outflows. 
    China stocks were roughly flat from two-week highs set in 
the previous session amid renewed debt worries after Beijing 
reported a significantly larger fiscal deficit in 2016. 
    In Hong Kong, the benchmark Hang Seng index  .HSI  added 0.3 
percent, to 22,969.38 points, while Hong Kong China Enterprises 
Index  .HSCE  gained 0.4 percent, to 9,769.37 points. 
    Trump's move on Monday to withdraw the United States from 
the Trans-Pacific Partnership trade deal has weighed on the 
dollar, making it cheaper to import some raw materials, with an 
index tracking the sector adding around 3.1 percent by midday. 
 urn:newsml:reuters.com:*:nL1N1FD18X  urn:newsml:reuters.com:*:nL4N1FE03J 
    The dollar  .DXY  was on the defensive after hitting a 
seven-week low against a basket of major currencies on Monday, 
while futures contracts of rebar  SRBK7  gained nearly 4.3 
percent at the lunch break.  
    Heavily import-dependent paper maker Nine Dragons Paper 
Holdings Ltd  2689.HK  and Lee & Man Paper Manufacturing Ltd 
 2314.HK  jumped, to around 10 percent and 4 percent 
respectively, at midday.  
    Shares were also bolstered by Nine Dragons Paper's surprise 
earnings upgrade with the company forecasting interim profit to 
rise over 45 percent.  urn:newsml:reuters.com:*:nFWN1FD01L 
    "Looks like the market would face some difficulty to rise 
above 23,000 points, since it lacks new capital inflows from the 
outside," said Linus Yip, strategist at First Shanghai 
Securities Ltd, referring to the tepid inflows in recent weeks. 
    Yip said that Trump's protectionist stance and consequent 
lowering of the dollar are lending some support to resource 
stocks, but he remained cautious about the hurdles on capital 
inflows to Hong Kong from an expected uptick in U.S. interest 
rates this year.   
    In China the blue-chip CSI300 index  .CSI300  was unchanged 
at 3,363.21 points at the end of the morning session, while the 
Shanghai Composite Index  .SSEC  gained 0.1 percent, to 3,139.81 
points.  
    Beijing reported a significantly larger fiscal deficit in 
2016 than it targeted, as the world's second largest economy has 
relied on government spending to stabilise economic growth in 
the past year, raising concerns about China's mounting debt 
load.  urn:newsml:reuters.com:*:nL4N1FD38C 
    Most sectors retreated modestly, but an index tracking 
energy stocks  .CSI300EN  advanced 1.3 percent after receiving a 
boost from heavyweights China Petroleum & Chemical Corp 
 600028.SS  and PetroChina Co Ltd  601857.SS . Both added more 
than 2 percent by the lunch break on restructuring hopes. 
 
    <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ 
China stock market graphics suite     http://reut.rs/1NfkoGl 
    ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> 
 (Reporting by Jackie Cai and John Ruwitch; Editing by Shri 
Navaratnam) 
 ((Jackie.Cai@thomsonreuters.com; +86 021 6104 1775;)) 
 
Keywords: CHINA STOCKS/MIDDAY