* HSI +0.8 pct, H-shares +0.8 pct, CSI300 -0.6 pct
* Chinese financial and consumer plays drop after weak China
* Hong Kong rises on short-covering
* Sinopec drops 2.2 pct after a broker downgrade
By Yimou Lee
Feb 7 China shares fell on Friday in their first
trading session of the new Lunar New Year, dragged down by
Chinese financial and consumer stocks on further signs that the
world's second-largest economy was losing momentum.
Hong Kong shares rose for a second day as investors covered
short positions in some hard-hit counters after a recent
sell-off that pushed the benchmark index to its lowest in almost
By midday, the CSI300 index of the leading
Shanghai and Shenzhen A-share listings was down 0.6 percent,
while the Shanghai Composite Index slipped 0.2 percent
to 2,028.34 points as traders returned from a long holiday break
since Jan. 31.
The Hang Seng Index was up 0.8 percent at 21,589.92
points. The China Enterprises Index of the top Chinese
listings in Hong Kong also rose 0.8 percent.
They have fallen 2 percent and 2.1 percent so far this week,
"If you consider recent drops in the overseas markets, the
A-share market is doing quite well today," said Ben Kwong, Hong
Kong-based chief operating officer of stockbroker KGI Asia.
"After the recent selloff, investors are covering short
positions and cultivating a rebound, which may not be
sustainable," Kwong said. "It's an up and down market, jumping
like a horse."
The HSBC/Markit Services Purchasing Managers' Index (PMI)
retreated to 50.7 in January, its slowest pace in almost 2-1/2
years after firms secured a smaller volume of new business, a
private survey showed, adding to growing signs of slackening in
the Chinese economy.
Leading losses in China were financial and consumer
counters. Ping An Insurance Group Co of China Ltd
dropped 2.7 percent to its lowest in more than two months, while
Retailer Suning Commerce Group fell 2.5 percent.
Chinese property companies were also weak after local media
reported tepid home sales in first-tier cities during the
week-long holiday. China's largest developer by sales China
Vanke fell 1.5 percent to a two-week low, while Poly
Real Estate shed 0.8 percent.
In Hong Kong, shares in Lenovo Group Ltd fell 0.4
percent after Google Inc acquired 618 million shares,
about 5.9 percent of holdings in the Chinese PC giant, in the
open market on Jan. 30, according to a disclosure from the Hong
Kong stock exchange late on Thursday.
China Petroleum & Chemical Corp was
hit by a downgrade from "neutral" to "underperform" from Bank of
America Merrill Lynch analysts. Shares in the company shed 0.5
percent in Shanghai and 2.2 percent in Hong Kong.
Shares of Birmingham International Holdings Ltd
plunged 35.1 percent in resumed trading after its executive
director had resigned on Wednesday.