October 30, 2018 / 4:31 AM / 18 days ago

China stocks higher at midday on rebound, regulator liquidity pledge

* SSEC 0.7 pct, CSI300 1.0 pct, HSI -0.17 pct

* “Nifty 50” index up 1.27 pct but analysts see weakness ahead

* State-owned banks seen swapping yuan for dollars in forwards

* Yuan nears 6.97 per dollar level

SHANGHAI, Oct 30 (Reuters) - Shares in China rose on Tuesday, rebounding from Monday’s plunge after the securities regulator said it would enhance market liquidity, and despite a report that tariffs on all remaining Chinese imports to the U.S. could come sooner than expected. ** The CSI300 index bounced 0.96 percent to 3,106.53 points at the end of the morning session after falling 3 percent on Monday, while the Shanghai Composite Index gained 0.72 percent to 2,560.38 points after Monday’s 2.2 percent drop. Both indexes reversed early session losses that had seen the Shanghai Composite down as much as 0.8 percent and the CSI300 down as much as 0.85 percent. ** China’s securities regulator said Tuesday that it would enhance market liquidity, and encourage share buybacks and mergers and acquisitions by listed firms, the latest in a string of official statements aimed at boosting markets. ** But adding to woes over global trade, the United States is preparing to announce tariffs on all remaining Chinese imports by early December if talks next month between presidents Donald Trump and Xi Jinping fail to ease the trade war, Bloomberg reported on Monday. ** The Hang Seng index dropped 0.17 percent, to 24,769.77 points. The Hong Kong China Enterprises Index gained 0.48 percent, to 10,060.54 points. ** The Shanghai SE50 index, an index tracking the 50 most representative sector leaders in Shanghai and dubbed China’s “Nifty 50”, gained 1.27 percent, but some analysts forecast possible weakness ahead. ** “Since September, many indexes representing small and medium-sized enterprises have broken lower, and the Shanghai Composite and SCI have followed them down,” said analysts at SDIC Essence Futures said in a note. “The SSE50 index still remains rangebound, but considering the bleak economic situation and market sentiment, the likelihood of the SSE50 also breaking lower is significant.” ** The SSE50 is down 15.4 percent for the year, compared to a 22.6 percent drop for the Shanghai Composite. ** Consumer firms remained weak, with a sub-index tracking consumer staples companies down 2.53 at the end of the morning session. Distillers deepened losses, with Kweichow Moutai Co Ltd down 5.63 percent after dropping 10 percent on Monday on lower profit growth. ** The financial sector sub-index gained 2.31 percent, the consumer staples sector fell 2.53 percent, the real estate index added 2.84 percent and the healthcare sub-index rose 1.18 percent. ** The smaller Shenzhen index was up 0.25 percent and the start-up board ChiNext Composite index was higher by 0.15 percent. ** Around the region, MSCI’s Asia ex-Japan stock index was firmer by 0.28 percent while Japan’s Nikkei index was up 1.39 percent. ** The yuan was quoted at 6.9688 per U.S. dollar, 0.1 percent weaker than the previous close of 6.962. The currency finished its onshore trading session Monday at its weakest level in more than a decade. ** On Tuesday, traders said that they saw major state-owned Chinese banks swapping yuan for dollars in forwards in what they said was likely a move to stockpile dollars for future use in supporting the yuan.

Reporting by Andrew Galbraith; Editing by Sunil Nair

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