* HSI -0.2 pct, H-shares -0.5 pct, CSI300 +0.2 pct
* HSI fails at 23,900 for second time in four days
* China insurers slide after HSBC's Ping An stake sale
* China banking sector strong, Minsheng up again
* Kweichow Moutai at lowest close since May 2011
By Clement Tan
HONG KONG, Feb 4 Hong Kong shares reversed early
gains to end lower in choppy Monday trade, as investors took
profit on the Chinese insurance sector after mainland regulators
approved HSBC's sale of its remaining stake in Ping An
Investors rotated into Chinese banking stocks, giving
further chase to the rally in the sector at the start of the
last full week of trading before the Lunar New Year holiday.
The Hang Seng Index closed down 0.2 percent at 23,685
points after failing at chart resistance at 23,900 for the
second time in four days. The China Enterprises Index of
the top Chinese listings in Hong Kong fell 0.5 percent.
In the mainland, however, the CSI300 of the top
Shanghai and Shenzhen A-share listings ended up 0.2 percent at
2,748 points, its highest close since November 2011. The
Shanghai Composite Index gained 0.4 percent.
Gains in Shanghai came in the highest volume since March
2012. Both onshore Chinese indexes have bounced 30 and 24
percent, respectively, from a Dec. 3 low.
"Most investors still remain very invested in the market,
torn between wanting to take some profit because they sense a
short-term correction coming up and not wanting to miss the next
leg up," said Jackson Wong, Tanrich Securities' vice-president
for equity sales.
Wong added that infrastructure-related stocks that have
recently corrected could see the next leg of rotational buying,
with the market's focus after the Lunar New Year holiday likely
turning towards China's annual parliamentary meeting starting in
Chinese railway counters are one example. On Monday, shares
of China Railway Group lost 0.9 percent in
Hong Kong and 1 percent in Shanghai. China Railway Group has
tumbled 7 percent in Hong Kong from a Jan. 15 peak.
Chinese insurers were another source of weakness on Monday.
Investors took profit on the sector after the approval late on
Friday from China's insurance regulator for HSBC's sale of its
remaining $7.4 billion stake in Ping An Insurance
Ping An's shares slid 2.8 percent to HK$68.90 in an
intra-day reversal in Hong Kong, but stayed above the HK$59 per
share level that HSBC had priced its stake sale. Its Shanghai
shares climbed 1.4 percent.
Its larger rival, China Life Insurance
slipped 1.9 percent to its lowest close since Dec. 31 in Hong
Kong. China Life's Shanghai shares slid 2.2 percent.
Shares of Bank of China climbed 1
percent in Hong Kong to its highest close since June 2011. Gains
nearing 43 percent from a Sept. 5 low have now prodded BOC's
relative strength index (RSI) values to its most overbought
level since October 2010.
Mid-sized rival China Minsheng Bank
jumped another 2.7 percent each in Hong Kong and Shanghai to new
multi-month highs, extending strong gains since December.
Coal counters were also strong in the A-share market, as
investors welcomed local news reports of a new policy aimed at
more sustainable mining practices. In Shanghai, China Shenhua
Energy Co Ltd rose 2.7 percent to its highest in
LUNAR NEW YEAR PLAYS
CICC strategists said on- and offshore Chinese shares tend
to generate "decent market returns before the Chinese New Year,
while relatively muted after," with industrials and material
sectors stronger before the holidays.
Both CSI300 and Shanghai Composite indexes have yielded
positive returns in the five days leading up to the Lunar New
Year holiday since 2003, according to a Hong Kong-based trader.
Those two were outperformers among sectors in Shanghai on
Monday, with the Shanghai materials sub-index up 1.1
percent and the industrial sub-index up 0.7 percent.
Shares of Chinese premium booze producers were hit by a
People's Daily commentary urging government departments to stop
using public money during the upcoming Lunar New Year as part of
an official campaign to fight corruption.
Kweichow Moutai fell 2.2 percent to its lowest
close since May 2011 in Shanghai. Its shares have slumped almost
32 percent from a July 12 peak.