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3 months ago
China stocks steady as regulatory worries linger; Hong Kong up
May 9, 2017 / 4:37 AM / 3 months ago

China stocks steady as regulatory worries linger; Hong Kong up

3 Min Read

* SSEC 0.0 pct, CSI300 -0.3 pct, HSI 0.4 pct

* CBRC issues guidance for banks to strengthen management of collateral

* Regulatory worries linger

SHANGHAI, May 9 (Reuters) - China's main stock indexes steadied on Tuesday morning, as lingering concerns over tighter financial regulations kept investors cautious.

The CSI300 index fell 0.3 percent, to 3,349.82 points at the end of the morning session, while the Shanghai Composite Index was unchanged at 3,077.67 points.

The official Xinhua News Agency published editorials for the sixth day in a row that highlighted Beijing's concerted campaign to guard against financial risks.

Tougher financial regulations have been a major concern for investors, many of whom fear the measures could go too far and hurt growth in the world's second largest economy.

In a bid to defuse asset bubbles and systemic risks, China has tightened its grip on the heated property market and other financial fronts ahead of a key party congress later this year.

Major state banks raised interest rates on home mortgages for first-time home buyers in Guangzhou, as part of China's efforts to control property prices, Shanghai Securities News reported.

"Those regulatory measures to curb financial risks are exceeding expectations, but chances are small for a major downturn in the benchmark indexes ahead of a key party congress later this year," said Yang Weixiao, an analyst with Founder Securities.

China's central bank on Tuesday skipped open market operations for a third straight trading day, further stoking concerns over the bank's shift to a tightening policy bias after years of ultra-loose settings.

The China Banking Regulatory Commission (CBRC) recently issued guidance for banks to strengthen their management of collateral to better service the real economy.

Investors are expected to remain cautious in the short term due to a lack of positive catalysts in the market, Yang added.

Most sectors lost ground by the lunch break, led by consumer and healthcare stocks.

Hong Kong shares extended gains on Tuesday, as investors searched for the next catalyst following France's presidential election.

The Hang Seng index added 0.4 percent to 24,664.03 points.

The Hong Kong China Enterprises Index also gained 0.4 percent, to 10,025.00 points.

Reporting by Luoyan Liu and John Ruwitch; Editing by Randy Fabi

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