(Corrects last paragraph to show time period for earnings
change was 2013 not 2012)
* HSI -0.2 pct, H-shares -0.4 pct, CSI300 -0.3 pct
* Chinese banks A shares strong, limit losses
* Citic Securities, Foxconn slid after profit warnings
* Apple suppliers tumble after Apple's revenue miss
By Clement Tan
HONG KONG, Jan 24 China shares surrendered
strong early gains on Thursday, weighing on Hong Kong, after
North Korea said it was proceeding with plans for more rocket
launches and a nuclear test.
Mainland China investors had chased gains in the banking
sector after the HSBC flash purchasing managers index (PMI) for
January, the earliest preview of China's economic health in
2013, came in at its highest in two years.
The CSI300 of the top Shanghai and Shenzhen
A-share listings was down 0.3 percent at midday, while the
Shanghai Composite Index slipped 0.1 percent.
Both had gained around 2 percent in early trade, and had
looked set to break above a trading range they had been bounded
in for the last two weeks.
The Hang Seng Index was down 0.2 percent at 23,599.3
points, slipping further from chart resistance at about 23,708,
the high on May 31 and June 1, 2011. The China Enterprises Index
of the top Chinese listings in Hong Kong shed 0.4
"Technically speaking, this reversal doesn't look good for
the A-share market. But it could spark some buying on dips, I
doubt it fundamentally changes anything until more facts
emerge," said Wang Ao-chao, UOB-Kay Hian's Shanghai-based head
North Korea said on Thursday it would carry out further
rocket launches and a nuclear test that would target the United
States, dramatically stepping up its threats against a country
it called its "enemy", according to its state news agency.
China Life Insurance was up by as much
as 2.8 percent in Shanghai, but went into the midday trading
break down 0.9 percent and was the top drag on onshore China
indexes. Its Hong Kong listing also shed 0.9 percent.
Citic Securities was flat in Shanghai,
but down 1.5 percent in Hong Kong after China's largest listed
brokerage warned of a 66 percent decline in 2012 earnings from a
Some members of the Chinese banking sector, which has
trailed the surge in the financial sector for brokerages and
insurance firms in the last few months, clung onto gains on the
Industrial and Commercial Bank of China (ICBC)
rose 1.7 percent in Shanghai, but was flat
in Hong Kong after the official China Securities Journal
reported its volume of its renminbi cross-border business jumped
70 percent in 2012 from a year earlier.
A Shanghai-based trader with one of the larger Chinese
brokerages said institutional buying was driving strength in the
Chinese banking sector, with retail investors still mostly
sitting on the sidelines.
Shares of Apple Inc's suppliers were hit after
Apple missed revenue expectations for a third straight quarter
after sales of its flagship iPhone came in below Wall Street's
AAC Technologies tumbled 5.7 percent to its lowest
in more than a week in Hong Kong. Goertek, which
supplies speakers to Apple, dived 5.8 percent to its lowest in
three weeks in Shenzhen.
Foxconn International dived 5.6 percent after the
firm said it expected to record a net loss for 2012 as a result
of low demand from its major clients.
China Mobile slid 1.2 percent to a two-month low
after JP Morgan analysts downgraded their rating on the stock
from "neutral" to "underweight," expecting the country's largest
mobile operator to post its first negative year-on-year earnings
change for 2013.
(Editing by Kim Coghill)