* HSI +0.1 pct, H-shares +0.6 pct, CSI300 +3 pct
* Mid-sized Chinese lenders spike as money costs dip
* Chinese property sector stays on defensive
* Want Want stretches gains after 2012 earnings surprise
By Clement Tan
HONG KONG, March 5 China shares rebounded on
Tuesday from the previous session's two-month closing low,
powered by strong gains for mid-sized lenders as jitters over
monetary policy tightening ebbed following a sharp dip in money
Hong Kong markets eked out a first gain in three days as
turnover dipped 10 percent from the day before, with Chinese
power producers strong after a work plan released by the
country's top economic planning agency to conserve energy raised
hopes of higher tariffs.
The Hang Seng Index inched up 0.1 percent to
22,560.5, while the China Enterprises Index of the top
Chinese listings in Hong Kong climbed 0.6 percent. Both are
still negative on the year, down 0.4 and 2.3 percent,
In the mainland, the CSI300 index of leading
Shanghai and Shenzhen A-share listings jumped 3 percent after
recording its heaviest one-day loss in more than two years on
The Shanghai Composite Index climbed 2.3 percent
from a two-month closing low as bourse volume dipped almost 20
percent from Monday, but managed to stay above its average in
the last 20 sessions.
"The magnitude of Monday's slump took many by surprise.
There could be more volatility as investors get used to a more
neutral monetary policy position and as more policy details
emerge from ongoing meetings," said Cao Xuefeng, Huaxi
Securities' head of research in Chengdu.
Chinese power producers were bolstered by policy buzz as the
parliamentary meetings got under way after the country's top
economic planning agency announced plans to accelerate market
reforms in its drive to conserve energy and fight
Shares of Chinese power producers surged on hopes of higher
tariffs, while putting coal producers under pressure. In Hong
Kong, China Resources Power jumped 5.4 percent, while
China Coal Energy slid 1.5 percent.
Chinese property counters stayed on the defensive after
outgoing Premier Wen Jiabao reiterated Beijing's commitment to
curbing speculative demand in the housing market at the National
The sector had slumped on Monday after China's cabinet
announced a new round of tightening measures on the housing
market late on Friday.
China Resources Land (CR Land) followed Monday's
nearly 9 percent loss with another 1.9 percent slide. CR Land
ended on Tuesday at its lowest close since mid-December after
having tumbled 16.5 percent from a Jan. 30 peak.
Shanghai-listed Poly Real Estate shed 1.1
percent after earlier plumbing its lowest intra-day level since
November. Shares of China's second-largest developer by sales
are now down 17 percent this year, compared with the 4 percent
gain on the CSI300.
"We are at the start of a tightening cycle which will make
it hard for the property sector to outperform," Matthew
Sutherland, Fidelity Worldwide Investment's senior investor
director for equities, said in a note after markets closed on
"Where we have holdings in the sector, these tend to be
focused on quality defensive names and stocks with higher
exposure to lower tier cities, where the impact may be more
muted," he added.
CHINA TIGHTENING FEARS OVERDONE?
Chinese banks led benchmark indexes higher in onshore
markets after China's benchmark seven-day repo rate dipped 110
basis points early on Tuesday, pointing to an improvement in
money supply conditions in the mainland.
This comes as Premier Wen announced China's 2013 economic
growth target at 7.5 percent, a level similar to 2012, and
consumer inflation at 3.5 percent, compared with 2012's 4
Mid-sized lender Ping An Bank surged the maximum
10 percent to a record high in Shenzhen. China Minsheng Bank
jumped 7.5 percent in Shanghai and 3.3 percent in
Chongqing Brewery jumped by the maximum 10
percent in Shanghai after Carlsberg launched a
partial take-over bid worth 2.65 billion Danish crowns ($461.49
million) for 30.31 percent of its shares.
Want Want China climbed 3.6 percent, extending
gains after the country's top food and beverage maker by market
value posted at the midday trading break a 32 percent rise in
2012 net profit, trumping market expectations.