September 27, 2018 / 4:42 AM / 3 months ago

China stocks drop despite FTSE Russell inclusion plans; HK down

* SSEC -0.4 pct, CSI300 -0.4 pct, HSI -0.5 pct

* China industrial profits turn slowed in August for 4th month

* HKMA raises rates in lockstep with U.S. Fed

SHANGHAI, Sept 27 (Reuters) - China stocks fell on Thursday after the U.S. Federal Reserve raised interest rates, and on data showing shrinking industrial profit in China, while news of A-share inclusion in FTSE Russell indexes offered little comfort. ** At the mid-day break, the Shanghai Composite index was down 11.02 points or 0.39 percent at 2,795.79. ** China’s blue-chip CSI300 index was down 0.39 percent, with its financial sector sub-index dropping 0.53 percent, the consumer staples sector down 0.94 percent, the real estate index slipped 0.29 percent and the healthcare sub-index rose 0.72 percent. ** The U.S. Federal Reserve raised interest rates on Wednesday and left intact its plans to steadily tighten monetary policy, as it forecast that the U.S. economy would enjoy at least three more years of growth. ** Profit earned by China’s industrial firms in August rose 9.2 percent from a year earlier, slowing for the fourth straight month with growth nearly halving from the previous month. ** Global index provider FTSE Russell said it will start including mainland Chinese shares in its major benchmarks from June next year, in a move that it expects will draw initial net inflows of $10 billion from passive investors. ** Chinese H-shares listed in Hong Kong fell 0.43 percent to 10,938.68 at midday, while the Hang Seng Index dropped 0.45 percent to 27,693.00. ** The Hong Kong Monetary Authority (HKMA) raised its base rate by 25 basis points on Thursday to 2.50 percent, in lockstep with a widely expected move by the U.S. Federal Reserve. ** The smaller Shenzhen index was down 0.67 percent and the start-up board ChiNext Composite index was weaker by 0.97 percent. ** Around the region, MSCI’s Asia ex-Japan stock index was weaker by 0.03 percent, while Japan’s Nikkei index was down 0.65 percent. ** The yuan was quoted at 6.8715 per U.S. dollar, 0.11 percent firmer than the previous close of 6.8791. ** The largest percentage gainers in the main Shanghai Composite index were Jiangsu SOPO Chemical Co Ltd, rising as much as 10.07 percent, followed by Shandong Swan Cotton Industrial Machinery Stock Co Ltd, gaining as much as 10.03 percent and Ningbo Menovo Pharmaceutical Co Ltd , up 10 percent. ** The largest percentage losses in the Shanghai index were BAIC BluePark New Energy Technology Co Ltd, which dropped as much as 23.59 percent, followed by HNA Technology Co Ltd , which lost up to 10.08 percent and A-Zenith Home Furnishings Co Ltd, which fell 10.02 percent. ** So far this year, the Shanghai stock index is down 15.13 percent, while China’s H-share index is down 6.2 percent. Shanghai stocks have risen 2.99 percent this month. ** The top gainers among H-shares were China Railway Group Ltd , up 3.35 percent, followed by Anhui Conch Cement Co Ltd, gaining 2.25 percent and ZhongAn Online P & C Insurance Co Ltd, up by 1.67 percent. ** The three biggest H-shares percentage decliners were Air China Ltd, which has fallen 3.14 percent, GF Securities Co Ltd, which has lost 2.7 percent and China Resources Land Ltd, down by 2.6 percent. ** About 6.69 billion shares have traded so far on the Shanghai exchange, roughly 60.4 percent of the market’s 30-day moving average of 11.08 billion shares a day. The volume traded was 13.96 billion as of the last full trading day. ** As of 0416 GMT, China’s A-shares were trading at a premium of 19.74 percent over the Hong Kong-listed H-shares. ** The Shanghai stock index is above its 50-day moving average and below its 200-day moving average. ** The price-to-earnings ratio of the Shanghai index was 11.88 as of the last full trading day, while the dividend yield was 2.7 percent. ** So far this week, the market capitalisation of the Shanghai stock index has risen by 0.36 percent to 29.94 trillion yuan. ** In Hong Kong, the sub-index of the Hang Seng index tracking energy shares rose 0.2 percent, while the IT sector dropped 1.8 percent. The top gainer on Hang Seng was Hang Seng Bank Ltd, up 2.2 percent, while the biggest loser was Galaxy Entertainment Group Ltd, which was down 3.23 percent.

Reporting by Andrew Galbraith, Editing by Sherry Jacob-Phillips

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