(Updates to midday)
* HSI down 1 pct, Shanghai Composite down 0.6 pct
* Last week's outperformers lead losses
* China oil majors weaker on lower oil prices
* Shanghai below technical support
By Clement Tan
HONG KONG, Jan 16 Hong Kong and China
shares started the week weaker on Monday but mildly
outperforming Asian peers as investors took profit on last
week's outperformers ahead of more economic data from China
expected on Tuesday.
China is expected to post fourth-quarter GDP growth of 8.7
percent on Tuesday, according to a Reuters poll. Beijing will
also release December industrial output, investment and retail
sales figures, which could spur market gains.
"We are waiting for China GDP data tomorrow for fresh
direction. If it comes in lower than expected, it's going to
boost hopes of easing, but any lift from that is likely to be
short term," said Jackson Wong, Tanrich Securities'
vice-president of equity sales.
The Shanghai Composite Index was down 0.56 percent
at 2,231.98 at midday, while the China Enterprises Index
of top mainland listings in Hong Kong had shed 1.27 percent
after gaining 6.5 percent last week.
Hong Kong's Hang Seng Index was down 0.95 percent at
19,021.85, with technical support seen at 18,858, the level at
which it closed on Jan. 9 before the jump last week.
PetroChina Co Ltd, which closed at the highest
since early August in Hong Kong on Friday, was among the top
drags on the Hang Seng Index, down 2 percent at HK$10.76.
Support is expected at around HK$10.70, the bottom of a range it
has traded in for the last four sessions.
Its peers were also weaker. CNOOC Ltd declined 1.2
percent, while China Petroleum & Chemical Corp (Sinopec)
was down 1.8 percent.
Commodities prices, including oil and gold, also weighed on
fears that mass sovereign debt rating cuts by Standard & Poor's
could further aggravate euro zone funding difficulties and
further impede global growth.
All three Chinese oil majors were key drivers of the Hang
Seng Index's strong start to the year, largely on the back of
rising oil prices from rising tensions on oil supply associated
with Iran sanctions.
Bucking losses on the day, Warren Buffett-backed Chinese
automaker BYD Co Ltd gained 2.2 percent to the highest
since Nov. 15 in midday volume that exceeded twice its 30-day
BYD is poised to rise for a sixth straight session, with
investors pouring back into the stock in anticipation it could
benefit from a new policy supporting production of
environmentally-friendly cars, analysts said.
SHANGHAI BREAKS BELOW SUPPORT, TURNOVER SLUMPS
In Shanghai, the benchmark broke below chart support seen at
around 2,241 points, the level seen on Dec. 14 before losses
The growth-sensitive materials sector was a standout
underperformer, with the Shanghai materials sub-index
down 1.3 percent. Inner Mongolia Baotou Steel Rare Earth (Group)
Hi-Tech Co Ltd (Baotou Steel) was a top drag.
Baotou Steel lost 4.6 percent, paring last week's gains
after it ended Friday at the highest in more than a month,
boosted by hopes of policy easing after the first few batches of
economic data last week.
Kweichow Moutai Co Ltd slipped 3.1 percent,
leading a slew of top liquor brands that have been standout
outperformers in the last two years while the Shanghai Composite
slumped 33 percent.
Midday A-share turnover on the Shanghai bourse was the
lowest in a week, nearing a three-year low. Tight money supply,
owing partly to Beijing's tight monetary policy to contain
inflation, is partly to blame. That has in turn made it
difficult for companies to raise funds in the mainland,
especially small and medium-sized enterprises.
On Monday, the China securities regulator told the Asian
Financial Forum in Hong Kong that there were plans to relax
controls on overseas listings for Chinese companies, while
pushing for an expansion of yuan-denominated shares in the
offshore yuan market in the territory.
(Editing by Chris Lewis)