* HSI flat, H-shares -0.8 pct, CSI300 -0.4 pct
* Angang Steel jumps after profit alert, JPM upgrade
* China property developers extend rally on curb relief
* Zoomlion slumps after 2012 earnings missed expectations
By Clement Tan
HONG KONG, April 2 Hong Kong shares were flat on
Tuesday as markets reopened after a break for Easter, weighed
down by lingering weakness in the mainland Chinese market and
underwhelming U.S. data.
The Chinese property sector extended gains after the
official Shanghai Securities News reported on Tuesday that the
central bank will not require local lenders to raise mortgage
rates uniformly to curb housing prices.
At midday, the Hang Seng Index was up less than 0.1
percent, while the China Enterprises Index of the top
Chinese listings in Hong Kong was down 0.8 percent.
The Shanghai Composite Index and CSI300 of
the leading Shanghai and Shenzhen A-share listings each ended a
choppy morning session down 0.4 percent. The CSI300 is now at
its lowest since late December.
China markets will be shut on Thursday and Friday for a
public holiday, while Hong Kong is closed on Thursday.
"I think investors will remain broadly cautious this week
and most of April," said Larry Jiang, chief investment
strategist at Guotai Junan International Securities.
"May has not been a good month historically, but with China
data looking like it will continue to underwhelm, some will be
thinking of beating the market before any sell-off next month,"
Chinese banks were among the top drags on Hong Kong indexes
after China's official manufacturing purchasing managers' index
came in on Monday at 50.9, an 11-month high but below a 52.0
Reuters poll consensus.
Industrial and Commercial Bank of China (ICBC)
slid 1.8 percent on Tuesday, while Agricultural Bank of China
(AgBank) shed 1.9 percent and Bank of China
declined 1.4 percent.
Chinese pharmaceutical stocks were among the major drags in
the onshore market after the official Economic Information Daily
newspaper reported that drug price reforms may hurt the profits
of pharmaceutical distributors.
Zhejiang Hisun Pharmaceutical Co Ltd tumbled 6
percent in Shanghai and Beijing SL Pharmaceutical Co Ltd
dived 7.4 percent in Shenzhen.
INDUSTRIAL RECOVERY IN CHINA?
Angang Steel was an outperformer in Hong Kong,
jumping 9.7 percent after the Chinese steel producer said on
Friday it expects to have swung from losses to profits in the
JP Morgan analysts upgraded their tactical view on Angang's
Hong Kong listing from "neutral" to "overweight", citing the
company's cost cutting measures as a positive surprise. They
also upped their target price by more than 40 percent.
But in a sign of the patchy recovery in China's industrial
sectors, Zoomlion Heavy Industry plunged 9.8 percent
after missing expectations with its 2012 final results late on
Thursday, which triggered a slew of brokerage downgrades.
Shares of China Vanke in Shenzhen were headed
for a third-straight gain, having climbed 2.2 percent at midday,
following more signs that the fresh curbs on home sales will not
be not as draconian as previously feared.
Measures announced over the weekend by several cities were
seen weaker than expected after the central government said in
early March that local governments must strictly enforce a 20
percent capital gains tax and higher downpayments for
second-home buyers in areas where property prices are rising too