China stocks fall after stimulus hopes fade, HK down on Tencent

Mon Apr 28, 2014 1:04am EDT

* HSI -0.4 pct, H-shares -0.1 pct, CSI300 -1.2 pct

* China president's comments dampen stimulus optimism

* Tencent down on censorship fears

* Hong Kong telecoms sector outperforms

By Natalie Thomas

BEIJING, April 28 (Reuters) - China stocks began the week with a fourth straight day of losses, shedding more than 1 percent after comments from President Xi Jinping cast doubt on hopes for further stimulus.

Hong Kong shares were also down, with index heavyweight Tencent the biggest drag on the market as investors worried that a clampdown on online video may affect future revenues.

By midday, the CSI300 index of the largest Shanghai and Shenzhen A-share listings fell 1.2 percent, while the Shanghai Composite Index slipped 1.2 percent to 2,011.43 points.

The Hang Seng Index was down 0.4 percent at 22,137.31 points. The China Enterprises Index of the top Chinese listings in Hong Kong dropped 0.1 percent.

Mainland investor confidence took a further hit over the weekend after state media reported comments from Xi Jinping at a politburo meeting on Friday, saying that current fiscal and monetary policies would basically remain unchanged.

"I think the language he used and the overall content in the speech was below what people had expected," said Du Changchun, an analyst at Northeast Securities in Shanghai.

"If there's no change in basic economic policy then it's likely there won't be any strong measures, and overall this is dragging on expectations."

China's blue chip state-owned banks managed a moderate improvement on overall index performance, after another of the country's top four institutions posted better-than-expected first quarter results.

China Construction Bank Corp was flat at the lunch break, having gained 0.8 percent earlier in the day, after the country's second-biggest listed lender posted a 10.4 percent rise in first-quarter net profit on Sunday thanks to higher interest and fee income.

The bank's Hong Kong shares were up 0.8 percent at lunch.

Agricultural Bank of China was up 0.4 percent and Industrial and Commercial Bank of China Ltd was flat, having risen 0.6 percent earlier in the morning.

In Hong Kong, shares in Tencent fell 3.0 percent, after China's State Administration of Press, Publication, Radio, Film and Television (SAPPRFT) banned four popular U.S. TV shows from being broadcast on online video streaming sites.

The ban is expected to precede a wider crackdown on foreign shows being aired on Chinese online platforms, which are currently enjoying rapid growth and are expected to be worth 37 billion yuan by 2017, according to iresearch.

Tencent operates China's biggest online video platform, according to its own website.

But shares of Yue Yuen Industrial Holdings Ltd rose 1.5 percent after the maker of footwear for brands including Nike Inc and Adidas, announced that over 80 percent of its workers, who staged one of China's biggest strikes over the past two weeks at its Dongguan factory, returned to work.

Telecom shares also gained, led by China Telecom Corp Ltd which rose 3.1 percent, after the company posted a 17.9 percent increase in Q1 net profit on Monday.

Shares in China Mobile Ltd and China Unicom Hong Kong Ltd, the mainland's two other major service providers, were also lifted by the news. China Mobile was up 0.9 percent and Unicom gained 1.8 percent. (Editing by Jacqueline Wong)

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