* HSI +0.4 pct, H-shares flat, CSI300 -0.9 pct
* Chinese banks sink after PBOC cash drain
* Zijin Mining spikes on soaring gold prices
* Vanke soars after approval for B to H share transfer
By Clement Tan
HONG KONG, March 4 China shares slipped early on
Tuesday, capping Hong Kong gains, with banks among the biggest
index drags as cash rates rose following the central bank's use
of a 28-day instrument for the first time since June to drain
If losses hold, this would be the first loss for the
Shanghai Composite Index in five days ahead of the
National People's Congress that starts in Beijing on Wednesday,
where policy targets for the year are expected to be announced.
At midday, the Shanghai Composite Index was down 0.8 percent
in lacklustre volumes, while the CSI300 of the largest
Shanghai and Shenzhen A-share listings fell 0.9 percent.
The Hang Seng Index rose 0.4 percent to 22,592
points, while the China Enterprises Index of the leading
offshore Chinese listings in Hong Kong was flat. The mood
remained rather cautious in global markets, with investors
eyeing the Ukraine-Russia situation warily.
"At this point, there is little reason for people to be too
active in the market. There's the Ukraine situation and some
have positioned for the meetings in China, in anticipation of
supportive policies," said Jackson Wong, vice president for
equity sales at Tanrich Securities.
Shares of China's largest gold miner Zijin Mining
climbed 3.5 percent in Hong Kong and 0.8
percent in Shanghai as gold prices hit a four-month high after
Russia's military intervention in Ukraine triggered a flight to
Mid-sized lenders Ping An Bank sank 1.8 percent
in Shenzhen and Industrial Bank shed 0.9 percent in
Shanghai after the benchmark short-term money rates in the
mainland jumped more than 100 basis points.
With a net 108 billion yuan ($17.6 billion) in repos
expected to mature this week and the seven-day repo rate
lingering at 2.4 percent at Monday's close - its lowest in
nearly a year - the Chinese central bank drained 85 billion yuan
via forward repos on Tuesday at its first of two weekly
scheduled open market operations.
The seven-day repo rate rose to about 3.5 percent, still a
long way off the 6.6 percent high in January or the 8.9 percent
peak in December. The PBOC used the 14-day repo to withdraw 35
billion yuan and the 28-day repo to remove 50 billion yuan.
China Vanke gained after the country's largest real estate
developer by sales said it now has regulatory approval to move
its B-share listing to Hong Kong, more than a year after the
plan was first mooted.
Vanke's A-share listing jumped 3.2 percent in
Shenzhen, while its B-share listing surged the
maximum 10 percent.
Forgame soared 6.1 percent to its highest since
mid-January in Hong Kong after the Chinese gaming company
announced its $70 million stake acquisition in unlisted sector
peer Magic Feature.