China stocks fall as property, nickel shares cool; Tencent pushes up Hong Kong

Thu May 15, 2014 12:59am EDT

* HSI +0.3 pct, H-shares -0.5 pct, CSI300 -0.9 pct

* Tencent jumps after strong earnings, share split

* China property shares fall as investors took profit

* Energy, telecommunication sectors pull down H-shares (Updates to midday)

By Grace Li and Chen Yixin

HONG KONG/SHANGHAI, May 15 (Reuters) - China shares fell on Thursday as investors took profit on property and nickel shares, which had produced solid gains this week.

Hong Kong's main index eked out a rise, lifted by tech heavyweight Tencent Holdings Ltd, which posted better-than-expected first quarter results, while H-shares were weighted down by the energy and telecommunication sectors.

At midday, the Hang Seng Index was up 0.3 percent at 22,649.91 points. If thy index stays in positive territory, Thursday will produce a sixth straight daily gain.

The China Enterprises Index of the top Chinese listings in Hong Kong fell 0.5 percent.

The CSI300 of the leading Shanghai and Shenzhen A-share listings fell 0.9 percent, while the Shanghai Composite Index was down 0.7 percent at 2,032.79 points.

"There is no reason to support the index rising too much as the fundamentals in China's economy still haven't improved," said Du Changchun, an analyst at Northeastern Securities in Shanghai.

The CSI300 property subindex, which climbed the past three days, declined 1.4 percent in the morning session.

China Vanke Co Ltd fell 0.8 percent, Poly Real Estate Group Co Ltd was down 1.6 percent and China Union Holdings LTD slumped 5.2 percent.

Shares of nickel-related business, which had soared in the past week, also fell back. Chengdu Huaze Cobalt & Nickel Material Co. Ltd was down 9.2 percent and Jilin Ji En Nickel Industry Co Ltd off 6.8 percent.

In Hong Kong, the benchmark was mainly lifted by social networking and online gaming firm Tencent, which jumped 5.5 percent after reporting record net income - well above analyst expectations - and the biggest profit growth in three years.

Tencent was the most actively traded stock in the morning, with nearly HK$3 billion ($387 million) worth of shares changed hands after the company conducted a five-for-one share split to attract small investors.

The energy and telecommunication sectors were drags for H-shares. Analysts said some rotational buying is going on after shares in those two sectors climbed recently.

China Telecom Corp Ltd slid 4.2 percent, Sinopec Corp lost 1.0 percent and PetroChina Co Ltd was down 0.8 percent. (Reporting by Grace Li; Editing by Richard Borsuk)

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