* HSI -0.2 pct, H-shares -0.9 pct, CSI300 -0.4 pct
* HK midday turnover lowest this year
* Profit taking hits Chinese financial, railway stocks
* Kweichow Moutai sinks, dropped censure on price cutters
By Clement Tan
HONG KONG, Jan 16 Mainland Chinese shares
retreated from 7-1/2-month highs on Wednesday, weighing on the
Hong Kong market, as investors took profits on recent
outperformers such as Chinese financials ahead of more China
economic data at the end of the week.
The Hong Kong property sector was mixed even as the
territory's chief executive announced measures in his annual
policy address to provide about 300 hectares of land for 128,700
housing units in the short- to medium-term to cool soaring home
The Hang Seng Index went into the midday trading
break down 0.2 percent at 23,333.8 points, retreating further
from the 23,400 level that has stymied gains for the benchmark
for much of the past two weeks.
The China Enterprises Index of the top Chinese
listings in Hong Kong fell 0.9 percent as morning turnover in
the Chinese territory sunk to its lowest this year.
On the mainland, the Shanghai Composite Index
declined 0.4 percent while the CSI300 of the top
Shanghai and Shenzhen A-shares slipped 0.3 percent.
Fresh inflows had pushed China shares on Tuesday to their
highest levels since early June. The CSI300 has surged more than
20 percent since early December on signs that China's economy
was regaining momentum.
Data showing China's foreign direct investment inflows
falling by a smaller percentage in December than the month
before helped trim losses, ahead of fourth-quarter GDP and
December industrial output, retail sales and house price data
expected on Friday.
China's annual economic growth may have quickened to 7.8
percent in the fourth quarter a Reuters poll showed, snapping
seven straight quarters of weaker expansion, but the recovery is
likely to be tepid and the economy may need continued policy
"We might see more interest in Hong Kong property developers
later, but otherwise there is no real reason to enter the market
today," said Jackson Wong, Tanrich Securities' vice-president of
"Wall Street's fading rising momentum is a concern in Hong
Kong and we are awaiting China's Q4 GDP," Wong added.
Hong Kong developer Sun Hung Kai Properties
slipped 0.2 percent, while New World Development shed
0.3 percent and Cheung Kong Holdings edged up 0.2
Shares of China Life Insurance, the
country's largest insurer, fell 1.5 percent off a one-week high
in Hong Kong and 2.4 percent from a 21-month high in Shanghai.
China railway counters, which carried strong 2012 gains into
the new year, were also weaker on the day. China Railway
Construction dropped 1.6 percent in Hong Kong. Losses
on Wednesday trimmed its 2013 gains to 5 percent after a 106
percent surge in 2012.
Kweichow Moutai sank 2.5 percent after the
official Shanghai Securities News reported that the leading
producer of premium Chinese white spirits has dropped sanctions
on suppliers for reducing prices.
CHINA PROPERTY IN FLUX
Shares of Chinese property developers were a key source of
weakness in the onshore market after a series of news headlines
triggered some profit taking on the sector after it led a broad
market jump on Monday.
China Business News reported that Beijing must prevent
stimulative monetary policy from diminishing the impact of
property controls, citing a report by a think tank under the
Ministry of Land and Resources.
Poly Real Estate lost 1.9 percent in Shanghai,
leading a sub-index of property-related stocks down 1.3 percent.
China Overseas Land lost 1.2 percent in Hong Kong.
Various official media reported that outgoing Premier Wen
Jiabao said more research is required on tax reforms to ensure
the healthy development of the real estate sector and equitable
The official China Securities Journal reported on Wednesday
that Beijing may need to increase land supply in first-tier
cities this year to stabilize land prices and market
expectations, citing unidentified sources.