* HSI -1.6 pct, H-shares -1.6 pct, CSI300 -1.9 pct
* Cyclicals lead selloff after weak China data stokes
* Jiangxi Copper H-share at 8-mth low, Cinda Asset
* China Southern Air sinks on sliding yuan, Malaysia air
By Clement Tan
HONG KONG, March 10 China's CSI300 index slid to
its lowest in nearly nine months early Monday, weighing on Hong
Kong markets, after data showed exports unexpectedly tumbled in
February, reigniting some fears of a slowdown in the world's
Data over the weekend also showed inflation remained benign,
but some investors were more concerned that producer prices fell
for the 24th consecutive month, as the lack of pricing power
suggested China is still struggling with excess capacity.
At midday, the CSI300 of the largest Shanghai and
Shenzhen A-share listings was down 1.9 percent at its lowest
since June 25. The Shanghai Composite Index sank 1.7
The Hang Seng Index shed 1.6 percent to 22,294.9
points, its lowest since Feb. 26. The China Enterprises Index
of the leading offshore Chinese listings in Hong Kong
also sank 1.6 percent to its lowest in a month.
"Markets are over-reacting a little today, nobody's caring
too much about the data skew from the different timing of the
Chinese New Year this year from last year," said Alex Wong,
director of asset management at Ample Finance.
"That said, my longer-term prognosis on China remains
pessimistic. Unless you see a turnaround in producer prices,
which would suggest they are getting excess capacity under
control, it's not possible to play the China macro game," Wong
Cyclical counters Anhui Conch Cement
fell 4.7 percent in Hong Kong and 3.8 percent in Shanghai.
Jiangxi Copper tumbled 4.5 percent to an
eight-month low in Hong Kong and 4.8 percent in Shanghai.
China's consumer prices rose 2 percent in February from a
year earlier, their slowest rate in 13 months as pork prices
fell by their most in over a year, a sign that slowing growth
rather than rising prices poses a bigger risk.
Exports in February fell 18.1 percent from a year earlier,
following a 10.6 percent rise in January, the General
Administration of Customs said on Saturday. Imports rose 10.1
percent, yielding a trade deficit of $23 billion for the month
versus a surplus of $32 billion in January.
Markets failed to take any cheer from an official China
Securities Journal commentary on Monday, which highlighted the
difficulty of hitting this year's 7.5 percent growth target,
while suggesting policies aimed at balancing overall reform with
stable growth are likely due in the second quarter.
In Hong Kong, China Construction Bank sank 1.9
percent, as did China Cinda Asset Management, which
was created to manage bad debts.
Nomura banking analyst Lucy Feng on Monday recommended a
long Cinda and short CCB trade. She downgraded CCB to neutral on
rising concerns of property-related loans.
A plunging yuan further weighed on airlines, port operators,
shippers and exporters. China's yuan opened trade at
6.1554 per dollar on Monday, down 0.5 percent from Friday's
close of 6.1260. If losses hold, this would be the currency's
biggest one-day loss since December 2008.
China Southern Airlines underperformed the
airlines sector in Hong Kong, sinking 3.5 percent. Further
hurting the stock was news that two passengers aboard the
missing Malaysia Airlines flight had bought tickets using stolen
passports through the Chinese carrier on a code-share basis.
"That incident will inevitably weigh on sentiment on its
stock," said Ample Finance's Wong.
Tencent Holdings shares ended a volatile morning
down 2 percent after buying a 15 percent stake in e-commerce
firm JD.com for $214.7 million, as the two seek to challenge
Alibaba Group Holding's dominant position in online shopping in