* HSI flat, H-shares +0.5 pct, CSI300 +2.2 pct
* BYD leads auto gains after electric car subsidies extended
* Rural-urban pension merger buoys insurers, pharma sectors
* Chow Tai Fook jumps after posting robust CNY sales
By Clement Tan
Feb 10 Shanghai shares jumped to their highest
level in six weeks on Monday, supporting the Hong Kong market,
led by the auto sector after the Chinese government extended
subsidies for electric vehicles beyond 2015.
Chinese insurers and pharmaceutical counters were buoyed by
an official announcement of a merger of rural and urban pension
plans. State media also reported the State Council recently
ordered an acceleration in the expansion of health insurance
covering serious illness for rural residents.
Gains came in robust volumes in the mainland, ahead of a
fresh batch of macroeconomic data later in the week. The
People's Bank of China's two weekly scheduled open market
operations will also come into focus, with maturities due to
drain 450 billion yuan this week.
By midday, the Hang Seng Index was flat at 21,632
points, while the China Enterprises Index of the top
offshore Chinese listings in Hong Kong rose 0.5 percent.
The H-share index has rebounded more than 2 percent from a
six-month closing low on Feb. 5, but Bank of America-Merril
Lynch's China equity strategist David Cui warned the bounce from
technically oversold levels could fall short of the major
rallies seen since the 2008-09 financial crisis.
The Shanghai Composite Index was up 1.8 percent at
2,080.5 points, its highest since Jan. 3. The CSI300
of the largest Shanghai and Shenzhen A-share listings climbed
"The A-share market was pretty solid in its return last
Friday from the week-long holiday despite the slump in global
markets, so that is serving as a good basis for further gains
today with all the policy news flow over the weekend," said Cao
Xuefeng, a Chengdu-based analyst with Huaxi Securities.
The Chinese central bank suggested in its quarterly monetary
policy report released on Saturday that cash market volatility
could persist as its reins in an explosion of off-balance sheet
Warren Buffet-backed BYD Co soared the
maximum 10 percent in Shenzhen and 4.5 percent in Hong Kong
after China's Finance Ministry announced on Saturday the
extension of subsidies for buyers of electric-powered vehicles
after the current programme expires in 2015.
Subsidies for 2014 will be reduced by 5 percent versus 10
percent announced previously and by 10 percent in 2015, versus
20 percent announced previously.
XJ Electric and FAW Car each jumped
by the maximum 10 percent in Shenzhen, with FAW also buoyed by
another announcement that its January sales jumped 40.2 percent
from a year earlier.
China Life Insurance jumped 2 percent
in Shanghai and 1.2 percent in Hong Kong after Beijing said late
on Friday it will merge pension plans for rural and urban
residents, a change that encourages labour mobility.
Chow Tai Fook climbed 3.4 percent, outperforming
most in the Chinese consumer sector after reporting that
same-store sales growth of 15 percent over the Chinese New Year
from last year's corresponding period.
Landing International surged 14.3 percent after
the Chinese property developer said late on Friday it is jointly
developing a $2.2 billion casino resort in South Korea with