China shares fall on weakness in financial firms, Hong Kong dragged by casinos

Tue Jul 8, 2014 12:59am EDT

* HSI -0.1 pct, H-shares flat, CSI300 -0.1 pct

* First drop seen among China's hot IPOs

* Datang Power at 7-month high on coal-chemical business deal (Updates to midday)

By Grace Li

HONG KONG, July 8 (Reuters) - China shares slipped by midday on Tuesday on weakness in financial firms, but pared losses after some property developers rebounded.

Hong Kong shares also edged lower, with the Macau gaming sector extending losses as revenue remained sluggish during the first week of July.

By midday, the Hang Seng Index dipped 0.1 percent to 23,509.77 points. The China Enterprises Index of the top Chinese listings in Hong Kong was flat.

The CSI300 of the leading Shanghai and Shenzhen A-share listings inched down 0.1 percent, while the Shanghai Composite Index was off 0.2 percent at 2,056.84 points.

"More initial public offerings (IPOs) will come up later in July, and the upcoming economic data could hardly exceed expectations, so such a small correction is normal," said Wang Weijun, an analyst at Zheshang Securities in Shanghai, who added upbeat data no longer has a big positive effect on the market.

Guangdong Ellington Electronics Technology dropped 2.2 percent, after surging by its daily limit in all five sessions since it started trading on July 1.

The company is the first to slide into negative territory among the nine hot new listings, six of which still jumped the maximum allowed 10 percent limit on Tuesday.

The Chinese property sector on the mainland was weaker in the morning session following recent strong gains, but recouped some losses by the lunch break. Poly Real Estate Group reversed losses with a rise of 0.2 percent.

Most of its Hong Kong-listed peers fell, with China Overseas Land & Investment and China Resources Land down 1.7 and 0.9 percent, respectively.

In Shanghai, Bank of China lost 0.4 percent while China Life Insurance shed 0.5 percent.

Macau gaming counters were again the standout underperformers in Hong Kong, with Galaxy Entertainment Group , MGM China and Wynn Macau all down more than 3 percent.

Barclays said in a note on Tuesday it expects total gross gaming revenue in July to decline 6 percent from a year earlier.

Datang International Power Generation surged 20.1 percent to a 7-month high in Hong Kong and 7 percent in Shanghai as trade resumed on Tuesday, after the company announced a deal to restructure its coal-chemical business.

Air China rose 1.2 percent after it signed a partnership deal with Germany's Lufthansa to set up a joint venture that will allow them to share revenue on certain routes by selling tickets for each others' flights.

Beijing is due to post June inflation data on Wednesday, with annual consumer inflation expected to ease to 2.4 percent, well below the central bank's 3.5 percent target for 2014, and the producer price index is likely to have dropped 1 percent. (Editing by Jacqueline Wong)

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