3 Min Read
* SSEC +0.1 pct, CSI300 -0.1 pct, HSI -0.4 pct
* SSE50 Index to hit near 2-yr-high on rising foreign interest
* Hong Kong's second board hit record low as penny stocks punished
SHANGHAI, June 28 (Reuters) - China's share market was steady on Wednesday morning, with an index tracking the country's top 50 stocks poised to scale its highest level in nearly two years thanks to stepped up foreign demand for Chinese blue-chips since the MSCI inclusion last week.
But Hong Kong stocks sagged, as sentiment was hurt by a stumble on Wall Street overnight and more losses on the city's second board following the previous session's nearly 10 percent tumble.
China's blue-chips CSI300 index dipped 0.1 percent, to 3,671.24 points by the lunch break, while the Shanghai Composite Index gained 0.1 percent, to 3,192.82 points.
The SSE50 Index, which tracks China's biggest 50 listed firms by market capitalization, is on course for its highest closing level since mid-August, 2015.
Index publisher MSCI's decision last week to include 222 Chinese "A-shares" into its emerging markets benchmark would "help prop up the value of China's quality blue-chips, and would help stabilize its stock market," Fang Xinghai, vice chairman of the China Securities Regulatory Commission (CSRC), told a seminar on Tuesday.
Fang said China's securities regulator will strive to reduce policy uncertainty and will adjust capital control mechanisms if necessary to expedite foreign investment in A-shares.
There are already signs of strong foreign appetite for Chinese blue-chips.
On Tuesday, the CSOP FTSE China A50 ETF, Hong Kong's biggest yuan-denominated exchange-traded fund (ETF) that buys Chinese shares under the so-called RQFII scheme, attracted inflows of roughly 1.5 billion yuan ($220.16 million), the biggest daily inflow this year.
Fund manager CSOP Asset Management attributed the inflow jump to the high correlation between the FTSE China A 50 Index, and MSCI's A-share inclusion plan, as well as a stabilizing yuan.
Sector performance was mixed, as banking shares posted robust gains, but consumer stocks corrected.
Hong Kong stocks fell, in line with most Asian markets, after Wall Street was knocked hard in the wake of a delay to a U.S. healthcare reform vote.
The Hang Seng index dropped 0.4 percent, to 25,747.90 points, while the Hong Kong China Enterprises Index lost 0.5 percent, to 10,447.92.
Sentiment was also soured by a slump in the Growth Enterprise Market (GEM), which skidded further, having tumbled nearly 10 percent on Tuesday to close at a record low.
Shares of penny stocks such as Greaterchina Professional Services Ltd plunged yet again as investors raced to reduce their exposure to the highly volatile market. Greaterahina Professional lost 31 percent, after Tuesday's 93 percent free fall.
Reporting by Samuel Shen and John Ruwitch