* HSI, H-shares +0.2 pct; CSI300 -0.2 pct
* Wuliangye, Moutai dive, contamination claims linger
* A-share weakness to persist on liquidity concerns: BoComm
* Angang Steel jumps after sale of Tianjin Angang Tiantie
By Clement Tan
HONG KONG, Nov 21 Onshore Chinese shares sank
further on Wednesday, hovering at their lowest since early 2009
and crimping gains in Hong Kong, where investors, cheered by
positive U.S. housing data, rotated into recent laggards.
The Hang Seng Index was up 0.2 percent at the midday
trading break, while the China Enterprises Index of the
top Chinese listings in Hong Kong also rose 0.2 percent. Both
went into the break at the low end of the day's range.
The CSI300 Index of the top Shanghai and Shenzhen
listings slipped 0.2 percent, while the Shanghai Composite Index
shed 0.4 percent after briefly dipping below 2,000
points. Both are near their lowest levels since March 2009.
"The two markets couldn't be more different right now. More
positive U.S. data could buoy further gains in Hong Kong, but
liquidity issues are going to weigh on the A-share market going
into year's end," Hong Hao, Bank of Communications (BoCom)
International Securities' head of China research, told Reuters.
More share offerings are due to hit the market as several
lockups expire and the China Securities Regulatory Commission
begins reviewing IPO applications, at a time when investor
interest in stocks is already low, he said.
On Wednesday, shares of Chinese premium liquor producers,
known more commonly as baijiu, were the biggest index drags
after media reported that the Henan provincial food authority
said while there was no evidence that Shenzhen-listed Jiugui
Liquor added plasticizers into their products, more
investigation is currently underway.
Wuliangye dived 2.7 percent to its lowest in
almost 2-1/2 years, taking losses on the month to 16 percent.
Kweichow Moutai shed 1.4 percent. Trading in
Jiugui's shares has been suspended since Monday.
In a sign of things to come, shares of baijiu distributor
Silver Base Group Holdings slumped 13.2 percent after
it warned in a filing with the Hong Kong Exchange late on
Tuesday that it expects to record a loss for the six months
ending September led by the economic slowdown and the low season
in the baijiu market in China.
Moutai shares were up as much as 28 percent on the year at
the end of October, but losses amounting to 14 percent so far in
November have trimmed its gains on the year to just 10 percent.
November is set to be Moutai's and Wuliangye's worst monthly
showing since April 2010, as investors bailed on the baijiu
sector as Communist Party leaders repeatedly warned against the
perils of corruption over the course of the 18th Party Congress
that ended last week.
The latest allegations against Jiugiu Liquor were first
reported on Monday by the Guangzhou-based 21st Century Business
Herald newspaper, which along with new Communist Party chief Xi
Jinping's latest comments against corruption, triggered steep
losses for the baijiu sector that day.
Chinese officials are often gifted bottles of baijiu by
people seeking favour, suggesting demand for baijiu could be
reduced after Xi Jinping was quoted by state media as saying on
Monday that the party risks major unrest and the collapse of its
rule if corruption is allowed to run wild.
CHINA MOBILE LEADS HONG KONG HIGHER
In Hong Kong, gains were led by shares of China Mobile
, the country's largest mobile operator and a popular
defensive play. China Mobile was up 1 percent at midday.
Angang Steel jumped 4.2 percent in Hong
Kong and 1.5 percent in Shenzhen after saying it will sell its
45 percent stake in Tianjin Angang Tiantie Cold Rolled Sheets Co
Ltd to the company's controlling stakeholder, Anshan Iron and
Steel Group for 1.18 billion yuan ($189 million).
Angang also said it will focus on developing its domestic
sales and distribution network.
China Resources Enterprises Ltd inched up 0.2
percent ahead of its third-quarter earnings. At the midday
break, the Chinese-focus retail conglomerate, posted a 27
percent increase in third quarter net profit.