* HSI -0.1 pct, H-shares +0.4 pct, CSI300 +0.2 pct
* HK indexes set for best weekly gain in six, outshining
* Chinese mid-sized lenders up as cash rates ease further
* Dongfeng rises after Q3 earnings, lifts auto sector
By Clement Tan
HONG KONG, Nov 1 Hong Kong and China shares were
tepid in morning trade on Friday, with the Chinese banking
sector mildly buoyed by a pair of surveys showing solid
manufacturing activity in the world's second-largest economy.
Gains on the day will help mainland indexes creep into
positive territory on the week, while stretching a strong week
for Hong Kong, where benchmark indexes are heading towards their
biggest weekly gain in at least six weeks.
By midday, the Hang Seng Index slipped 0.1 percent,
while the China Enterprises Index of the top Chinese
listings gained 0.4 percent. They are now up 2.2 and 4.8 percent
for the week.
The CSI300 of the leading Shanghai and Shenzhen
A-share listings inched up 0.2 percent, while the Shanghai
Composite Index crept up 0.1 percent. On the week, they
are now up 0.4 and 0.5 percent, respectively.
Volumes in both markets at midday were at their lowest in
about a week, suggesting investors may be pulling back ahead of
a key Nov. 9-12 China Communist Party policy meeting where major
economic reforms are historically decided on.
Chinese local media has been rife with reports on what may
be on the agenda of the four-day meeting starting next weekend.
On Friday, the official China Securities Journal reported
that China is expected to discuss increased supervision for
state-owned firms and the break-up of some monopolies to
encourage competition as part of reform efforts at the meeting.
"I think expectations are running too high ahead of the
Plenum meeting later this month. We need to be seeing more
concrete details before any more gains from here," said Hong
Hao, Bank of Communications International Securities.
But on Friday, strong readings from China's official and the
Markit/HSBC October manufacturing purchasing manager index (PMI)
helped eased growth concerns after a big divergence between the
two in September, buoying gains for mid-sized lenders in the
Minsheng Bank climbed 1.6 percent in
Shanghai and 0.9 percent in Hong Kong. Agricultural Bank of
China (AgBank) was the best performing
among the "Big Four", rising 1.3 percent in Hong Kong and 0.4
percent in Shanghai.
The sector was also helped on Friday as money rates in the
mainland eased further, with benchmark seven-day bond repurchase
agreement rates at its lowest in more than a week.
The Chinese auto sector broadly outperformed after Dongfeng
Group posted a 39 percent rise in third quarter profit
on improving sales in the mainland. In Hong Kong, Dongfeng
climbed 2.9 percent, while Guangzhou Auto Group spiked
Macau casino operator MGM China climbed 2.4
percent after its parent reported a narrower third-quarter loss
late on Thursday, with gaming revenue data for October due later
in the day a catalyst for further gains.
The Nasdaq-style ChiNext board of mainly high
growth, technology start-ups listed in Shenzhen dropped 1.4
percent and have now dived more than 12 percent from an Oct. 21