Hong Kong, China shares mixed as Syria worries eases

SHANGHAI Thu Aug 29, 2013 12:26am EDT

SHANGHAI Aug 28 (Reuters) - Hong Kong and Chinese shares were mixed on Thursday, as the offshore market rebounded from multi-week lows after Wall Street bounced overnight and fears of an imminent U.S.-led strike on Syria abated.

But mainland stocks fell, with analysts saying news of developments in the Syria crisis had little effect on Shanghai and Shenzhen-listed firms.

"Syria has a major impact, but it's more keenly felt in the offshore market. On the mainland the effect isn't all that big," said Zhang Weigang, an analyst at Shanghai Securities.

Hong Kong's Hang Seng Index recovered from multi-week lows, rising 0.52 percent to 21,635.97, while the sub-index of Hong Kong-listed China enterprises gained 0.61 percent.

Mainland indexes fell, bucking their recent trend of outperforming regional peers. The CSI300 Index, which tracks the largest firms listed in Shanghai and Shenzhen, dropped 0.44 percent in the morning session, while the Shanghai Composite Index lost 0.31 percent to 2,094.77.

In morning trade, Japan's Nikkei was up 0.53 percent, while South Korea's KOSPI added 1.43 percent.

Analysts said that military stocks had normalised today, suggesting fears over conflict have eased. "Yesterday we saw military stocks rising, but today they have come back into line," added Zhang.

Gains were limited as investors remained on edge as the United States sketched out plans for multinational air strikes on Syria that could last for days, prompting China to urge for restraint over the growing crisis.

Chinese markets have been on a gradual recovery trend since a low point in late June during an unexpected credit crunch engineered by the central bank. Analysts say sentiment has been supported by improving mainland economic indicators, as promoted in a report released on Monday by China's National Bureau of Statistics.

MOVERS AND SHAKERS

China Life Insurance Co Ltd , the world's biggest insurer by market capitalization, edged up 0.31 percent after it posted a 68 percent increase in first-half net profit.

Dairy products maker China Mengniu Dairy Co Ltd shot up 7.04 percent after it posted a 16 percent rise in first half net profit to 749.5 million yuan.

Agricultural Bank of China , which saw its Q2 profit beat estimates on Wednesday, rose 1.82 percent offshore after management said it will reduce bad loans and it told analysts it was considering raising capital by issuing preferred shares.

Hong Kong shares in Sinopec Corp , Asia's top refiner, were down 1.22 percent after China's environment ministry suspended some approvals for parent Sinopec Group.

PetroChina, meanwhile, rose 1.93 percent after industry officials said its 120,000-barrel-per-day subsidiary refinery in northwestern China is undergoing a major overhaul that will end in late September.

Zoomlion Heavy Industry Science and Technology Co Ltd , China's second-largest construction equipment maker, fell 3.18 percent offshore as it said first half net profit fell 48 percent.