* HSI -0.8 pct, H-shares -1.1 pct, CSI300 -0.6 pct
* Fed caution triggers profit taking in biggest 2013 gainers
* A-shares reverse early index gains in 1st 2013 trading day
* China insurers sink in HK, rise in Shanghai
By Clement Tan
HONG KONG, Jan 4 Hong Kong shares slipped from a
19-month high as investors took profits on outperformers in the
past two days after the U.S. Federal Reserve signalled growing
concerns about its stimulative monetary policy.
The Fed's asset-purchase programme has been among the chief
reasons for the swelling inflows into the Chinese territory that
have buoyed markets. Fed reticence about further growing its
$2.9 trillion balance sheet could limit capital
The Hang Seng Index on Friday went into the midday
trading down 0.8 percent from Thursday's highest close since
June 1, 2011. The China Enterprises Index of the top
Chinese listings slid 1.1 percent after hitting its most
overbought levels in more than two years on Thursday.
The CSI300 of the top Shanghai and Shenzhen
listings fell 0.6 percent. The Shanghai Composite Index
slipped 0.2 percent at the resumption of trade after a three-day
New Year holiday in the mainland, starting 2013 on a weaker note
after stellar December gains.
"I won't be too worried about the Fed changing their tone at
this point, the U.S. economy will need to improve further from
here before that will happen," said Wang Ao-chao, UOB-Kay Hian's
Shanghai-based head of China research.
"We are coming off overbought levels today. This
cyclical-led rally in offshore Chinese shares should continue in
the next few weeks, China's improving economic data will help,"
On Friday, Chinese non-banking financial and coal stocks
were among the biggest drags after leading the surge in the
first two trading days of 2013 after a last minute U.S. deal
averting the fiscal cliff.
Shares of China Life Insurance fell 1.9 percent in
Hong Kong from Thursday's 18-month high, while Ping An Insurance
, its smaller sector rival, dropped 2.1 percent.
Citic Securities, China's largest listed
brokerage, which fell 3.8 percent on Thursday, sank another 4.3
percent on Friday, erasing Wednesday's 6 percent jump.
The mainland's securities regulator said last weekend that
it plans to allow eligible securities houses and insurers' asset
management units to develop and manage mutual funds in a bid to
reinvigorate an industry struggling to produce returns for
This follows an announcement last week allowing brokerages
to sell subordinated debt and the Chinese central bank pledging
to quicken the pace of reform in the financial sector. That news
sent shares of Chinese brokerages soaring last Friday.
Shares of Yanzhou Coal in Hong Kong, which had
surged more than 10 percent in the first two days of 2013 on
rising coal prices, slid 2.3 percent on Friday.
ALCOHOL SINKS CHINA
Chinese insurers were strong in mainland Chinese markets,
but weakness in alcohol counters dragged indexes off their
highest in more than six months.
Both indexes had started Friday up more than 1 percent, but
quickly gave up gains. Shanghai midday volumes were at their
highest since mid-December.
Kweichow Moutai declined 1.6 percent in
Shanghai, while rival Wuliangye lost 1.7 percent in
Shenzhen after the country's leaders over the New Year holiday
repeated pledges to combat corruption.
Moutai and Wuliangye produce premium white spirit liquor
that Chinese businessman often present to officials when seeking
Gold mining stocks were also weak as gold prices slipped 1
percent. Zijin Mining slipped 0.3 percent in
Shanghai and 2.9 percent in Hong Kong. Zhongjin Gold
slid 2.7 percent in Shanghai.