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Bargain hunting supports China stocks after 3-day sell-off, HK flat
September 26, 2017 / 4:40 AM / 22 days ago

Bargain hunting supports China stocks after 3-day sell-off, HK flat

* SSEC +0.1 pct, CSI300 +0.1 pct, HSI flat

* CSRC vows to maintain market stability ahead of Party Congress

* ADB maintains strong China growth forecast

SHANGHAI, Sept 26 (Reuters) - China’s main stock indexes steadied on Tuesday after three days of losses as investors hunted for bargains in beaten-down property and resources shares.

Expectations that Beijing will not tolerate further market weakness ahead of the key Communist Party Congress next month also helped boost confidence, which has been rattled in recent sessions by fears that economic growth is starting to slow.

China’s securities watchdog said late on Monday that maintaining market stability is of “extreme importance”, and is a political task.

Both China’s blue-chip CSI300 index and the Shanghai Composite Index gained 0.1 percent by the lunch break, to 3,819.74 points and 3,343.90 points, respectively.

Property and resources shares, the biggest victims of the recent sell-off, rebounded. Both indexes gained 0.8 percent.

Property shares had been hit by fresh steps in some cities to cool housing prices, while resource shares were sold on worries that a government crackdown on air pollution could curb manufacturing and mining activity and factory demand.

Profits at China’s state-owned firms rose 21.7 percent in the first eight months of 2017 from the same period a year earlier, the Ministry of Finance said. While still robust, the pace of growth softened slightly from Jan-July.

HONG KONG

Hong Kong shares were also steady following Monday’s sharp fall, as investors largely ignored rising geo-political tensions over North Korea.

The Hang Seng index was unchanged at 27,491.87 points, while the Hong Kong China Enterprises Index gained 0.4 percent to 10,957.46.

North Korea’s foreign minister said on Monday that a weekend tweet by President Donald Trump counted as a declaration of war on North Korea and that Pyongyang reserved the right to take countermeasures, including shooting down U.S. bombers even if they are not in its air space.

Investors instead focused on the outlook for China.

The Asian Development Bank maintained its 2017 and 2018 forecasts for China’s growth at 6.7 percent and 6.4 percent. It had raised them in July.

On Monday, China’s state planner said the growth of the country’s overall leverage ratio has been clearly slowing and is now stabilising. The comments came days after S&P downgraded the country’s sovereign debt rating, saying government efforts to curb debt risks were not working as quickly as hoped.

The property sector stabilized after Monday’s slump.

Reporting by Samuel Shen and John Ruwitch; Editing by Kim Coghill

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