* HSI -0.1 pct, H-shares -0.6 pct, CSI300 -0.4 pct
* China cement producers rise on policies to rebuild shanty
* Greentown China plunges on profit warning
* WH Group jumps up to 11 pct in HK debut
(Updates to midday)
By Grace Li
HONG KONG, Aug 5 Hong Kong and China shares
slipped on Tuesday after a survey showed growth In China's
services sector fell to a record low, with property developers
the main underperformers.
The HSBC/Markit China services purchasing managers' index
(PMI) fell to 50.0 in July, the lowest reading since November
2005 when the data collection began, indicating a recovery in
the broader economy is still fragile and may need further
By midday, the Hang Seng Index inched 0.1 percent
lower at 24,572.63 points, while the China Enterprises Index
of the top Chinese listings in Hong Kong lost 0.6
The CSI300 of the leading Shanghai and Shenzhen
A-share listings fell 0.4 percent, while the Shanghai Composite
Index was off 0.3 percent at 2,216.42 points. Both
closed at their highest in almost eight months on Monday.
Zheng Weigang, a senior trader at Shanghai Securities, said
he did not see a big impact from the services PMI on the
markets. "Economic data need to corroborate each other. We need
further observation at the moment."
"Most investors are still in bullish mood and inclined to
choose those blue-chips which have growth potential in the
current macroeconomic environment. It's not crazy optimism but
cautious optimism," Zheng added.
Some economists blamed a slowdown in the housing market for
the weak reading, as property-related activities saw less
business. Two private surveys on Friday showed China's home
prices fell further in July from the previous month.
China Vanke, the country's biggest residential
property developer, shed 1.6 percent after posting July sales
which showed a big drop from June.
Smaller rival Greentown China tumbled 12.8 percent
in Hong Kong as the developer said late on Monday it expected a
decrease in net profit of more than 65 percent for the first
Cement counters were stronger on hopes that the recently
announced policy to rebuild shanty towns which currently
accommodate around 100 million people will buoy demand. Anhui
Conch Cement rose 1.4 percent, top percentage gainer
on the H-share index.
WH Group, the world's biggest pork company, jumped
as much as 11 percent in its Hong Kong trading debut on Tuesday
after pulling off its second attempt at an IPO by slashing
valuations to raise $2.1 billion.
ANTA Sports climbed another 1.2 percent to a
three-year high ahead of its interim earnings release on
Wednesday. It added 3.6 percent on Monday after the company said
it had become the sponsor of China's national gymnastics team.
Top index on the Hang Seng was HSBC Holdings,
which gained 0.8 percent after reporting a a 12 percent drop in
first-half profit on Monday.
Nomura said in a note on Tuesday the earnings downgrade
cycle should stop for HSBC, citing a better revenue outlook in
July-December 2014 owing to an improving macroeconomic situation
in Asia and expectations of higher rates in the UK and US.