* HSI +0.9 pct, H-shares +1.1 pct, CSI300 +0.7 pct
* China banks A and H shares diverge ahead of earnings
* Sinopec, Datang Power lifted by robust Q3 earnings
* China Modern Dairy sinks after $830 million stake sale
By Clement Tan
HONG KONG, Oct 30 Shanghai shares rebounded from
seven-week lows early on Wednesday, with Hong Kong markets also
higher, led by Chinese utilities and energy giants after solid
Earnings from mid-sized lenders lifted the Chinese banking
sector in Hong Kong, where risk plays were also buoyed by hopes
that the U.S Federal Reserve will leave its stimulus intact at
its October policy meeting ending later in the global day.
By midday, the Hang Seng Index was up 0.9 percent at
23,043.4 points, continuing a rebound this week after closing
last Friday at its lowest since Sept 6. The China Enterprises
Index of the top H-shares rose 1.1 percent.
The Shanghai Composite Index, which closed on
Tuesday at its lowest since Sept. 5, gained 0.8 percent. The
CSI300 of the leading Shanghai and Shenzhen A-share
listings rose 0.7 percent.
But gains came in relatively lackluster midday volumes in
both Hong Kong and China, pulling back from Tuesday.
"There's a bit of a rotation into the oil and power sectors
today in the A-share market, I'm seeing more 'buy' orders today
although not in the banking sector after recent gains," said a
Shanghai-based dealer at a major Chinese brokerage.
"It's still rather defensive in the A-share market, money
rates will remain a concern because it's the last day of the
month tomorrow and demand is high," the same dealer added.
Despite the Chinese central bank's first cash injection in
two weeks on Tuesday, the weighted average seven-day repo rate
- a benchmark of short-term money rates - hit
another high since the end-June cash crunch early on Wednesday.
The official China Securities Journal reported on Wednesday
that while there will not be a repeat of the end-June cash
crunch, money supply will likely remain "in a tight balance" in
the fourth quarter.
Chinese banking A-shares were hit by some profit taking
after recent gains. China Citic Bank slipped 0.3
percent, while Industrial Bank inched down 0.5
percent from Tuesday's month-high despite positive quarterly
In Hong Kong, Citic Bank jumped 3.9 percent, while
Industrial and Commercial Bank of China (ICBC) - the
sector's largest player - climbed 0.9 percent ahead of its
quarterly earnings, among a clutch due later in the day.
Other than ICBC, earnings are also expected from
Agricultural Bank of China , Bank of China
, Bank of Communications
and China Minsheng Bank .
China Petroleum and Chemical (Sinopec) Corp
jumped 3 percent in Shanghai and 1.7
percent in Hong Kong after posting a 20 percent rise in
third-quarter net profit, trumping expectations.
Datang Power jumped 6.2 percent in
Shanghai and 3.2 percent in Hong Kong after reporting a 103.6
percent jump in net profit in the first nine months of the year
from a year earlier.
China Modern Dairy dived 5 percent after three
unidentified shareholders sold 250 million shares at a discount
of as much as 6.1 percent to its Tuesday closing price, raising
HK$860 million, Hong Kong media reported.