SHANGHAI, Oct 26 (Reuters) - China shares fell on Friday morning in choppy trade as investor excitement over government support measures faded amid renewed weakness in the yuan.
** The CSI300 index ended the morning session down 1.04 percent at 3,161.20, while the Shanghai Composite Index lost 0.58 percent to 2,588.66. ** Hong Kong’s benchmark Hang Seng index dropped 1.41 percent.
** The Chinese stock markets jumped over 4 percent on Monday in response to a chorus of support from top government officials over the weekend, but have given up most of the gains. The CSI300 is currently up 0.84 percent for the week.
** “There’s still a lack of confidence, and the bearish mindset remains in place,” said Yang Hongxun, Shanghai-based analyst at investment consultancy Shandong Shenguang. He pointed to headwinds including a weaker yuan, volatile global markets, lingering concerns over pledged shares and domestic economic growth.
** The Chinese yuan continued its slide against the U.S. dollar on Friday, falling below the psychologically key level of 6.96 on the onshore spot market.
** The weaker yuan hit shares of airliners, as a strong greenback would increase value of liability of a sector burdened with heavy dollar borrowings. An index tracking the aviation sector fell 1.27 percent.
** The financial sector fell 1.52 percent on profit-taking after a strong rally in previous days, and as insurance giant China Life posted disappointing third-quarter results.
** China Life Insurance Co Ltd , the country’s second-biggest insurer by market value, reported on Thursday a 76 percent plunge in quarterly net profit due to lower equity income in a volatile domestic stock market.
Reporting by Samuel Shen and Andrew Galbraith; Editing by Gopakumar Warrier