August 28, 2019 / 4:43 AM / 23 days ago

China stocks down amid trade uncertainty; Hong Kong inches up

* SSEC -0.3%, CSI300 -0.4%, HSI +0.1%

* FTSE China A50 -0.5%

* HK->Shanghai Connect daily quota used -0.2%

* Shanghai->HK daily quota used 1.8%

SHANGHAI, Aug 28 (Reuters) - Chinese stocks fell on Wednesday morning amid lingering uncertainty around the Sino-U.S. trade war, as the positive impact from MSCI’s latest phase of China stock inclusion fades.

** The CSI300 index fell 0.4% to 3,800.04 at the end of the morning session, while the Shanghai Composite Index lost 0.3% to 2,892.70.

** Earlier in the week, U.S. President Donald Trump predicted a trade deal with China after positive gestures by Beijing, but China’s foreign ministry said it was unaware of any calls to the United States.

** The issue of the credibility of Trump has taken the centre stage, said JIngyi Pan, a strategist at IG Group.

** “While the baseline view that both the U.S. and China will eventually resolve the trade conflict to avoid sustaining a lose-lose situation remains, President Donald Trump’s mercurial temperaments have now been perceived to be a factor likely to invite China to hold their horses on a deal,” he wrote. “For markets, this added sense of uncertainty could also translate to further volatility.”

** The market has also lost support from MSCI inclusion on Wednesday. Chinese shares rose in the previous session, after MSCI raised the inclusion factor for A-shares to 15% from 10% after close on Aug. 27, driving passive net inflow of about $4.5 billion into A-shares.

** Most sectors fell, but automakers firmed after China announced measures to bolster car purchases.

** “The auto sector has been under pressure from some time now with likely some consolidation needed,” said Gerry Alfonso, a strategist at Shenwan Hongyuan Securities. “The recently announced measures from the State Council relaxing the limitations on car purchases will have a clear positive effect.”

** In Hong Kong, the Hang Seng index added 0.1% to 25,677.75, while the Hong Kong China Enterprises Index gained 0.2% to 10,014.49.

** Around the region, MSCI’s Asia ex-Japan stock index was firmer by 0.06% while Japan’s Nikkei index was up 0.15%.

** The yuan was quoted at 7.1579 per U.S. dollar, 0.06% firmer than the previous close of 7.1625.

** The largest percentage gainers in the main Shanghai Composite index were Shenyang Jinbei Automotive Co Ltd , up 10.1%, followed by Guangdong Rongtai Industry Co Ltd, gaining 10.09% and Hualing Xingma Automobile Group Co Ltd, up by 10.08%.

** The largest percentage losers in the Shanghai index were Suzhou Keda Technology Co Ltd, down 10.01%, followed by Nanjing OLO Home Furnishing Co Ltd, losing 10% and Changzhou Xingyu Automotive Lighting Systems Co Ltd , down by 9.52%.

** The top gainers among H-shares were Guangzhou Automobile Group Co Ltd, up 4.53%, followed by Dongfeng Motor Group Co Ltd, gaining 2.77% and Hengan International Group Company Ltd, up by 2.03%.

** The three biggest H-shares percentage decliners were CSPC Pharmaceutical Group Ltd, which has fallen 4.66%, Country Garden Holdings Co Ltd, which has lost 2.4% and Tencent Holdings Ltd, down by 1.3%.

** As of 04:18 GMT, China’s A-shares were trading at a premium of 29.36% over the Hong Kong-listed H-shares.

Reporting by Samuel Shen and John Ruwitch; editing by Gopakumar Warrier

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