May 27, 2019 / 4:55 AM / 4 months ago

Shanghai shares rebound from 3-month low on policy support hopes

* SSEC +0.3%, CSI300 unchanged; HSI -0.6%, hits 4-month low

* April industrial profits disappoint; Premier vows low VAT to bolster innovation

* Regional banks’ shares fall, financing costs rise after regulators take over Baoshang

HONG KONG, May 27 (Reuters) - China stocks climbed marginally on Monday after hitting their lowest in three months earlier in the session, as investors bet on Beijing’s policy support to ease the pain from U.S. tariffs. ** At the midday break, the Shanghai Composite index was up 0.3% at 2,860.5 points, having traded at its lowest level since February 22 in the morning session. The blue-chip CSI300 index was trading flat. ** CSI300’s financial sector sub-index slipped 0.1%, the consumer staples sector fell 0.8%, the real estate index slid 0.7% and the healthcare sub-index dipped 0.3%. ** Chinese H-shares listed in Hong Kong fell 0.9%, while the Hang Seng Index was down 0.6% at 27,188.85 points, touching its lowest level since January 24. ** The smaller Shenzhen index was up 0.8% and the start-up board ChiNext Composite index was higher by 1.4%. ** Data on Monday showed profits for China’s industrial firms dropped in April on slowing demand and manufacturing activity, suggesting the previous month’s rebound may have been a one-off and adding pressure for policymakers to step up support for a cooling economy. ** Premier Li Keqiang said on Friday China aimed to keep value-added taxes for the manufacturing industry at low levels and encourage companies to innovate, a move that Li said will ultimately help create jobs and maintain sustainable economic growth. ** China’s financial regulators said on Friday the country’s banking and insurance regulator will take control of Inner Mongolia-based Baoshang Bank due to the serious credit risks it poses, in a rare takeover of a domestic lender. Regional banks’ shares fell and their funding costs rose on Monday. ** Policymakers will unlikely let the Shanghai Composite slip below the key level of 2,800 points, as such a fall could trigger credit risks from pledged-share financing, Citic Securities analysts wrote in a note on Monday. ** China’s banking and insurance regulator said on Saturday it did not expect a persistent decline in the yuan and warned speculative short sellers they would suffer “heavy losses” if they bet against the currency. ** The yuan was quoted at 6.8940 per U.S. dollar, 0.09% firmer than the previous close of 6.9005. ** FTSE Russell is forging ahead with plans to add Chinese “A shares” to its widely tracked global benchmarks next month, a senior executive said, as China’s resolve to open its capital markets appears unaffected by the trade war. ** Around the region, MSCI’s Asia ex-Japan stock index was weaker by 0.1%, while Japan’s Nikkei index was up 0.3%. ** The largest percentage gainers in the main Shanghai Composite index were Datang Telecom Technology Co Ltd, Zhongchang Big Data Corp Ltd and Fuda Alloy Material Co Ltd, all up by 10%. ** As of 0400 GMT, China’s A-shares were trading at a premium of 26.57% over the Hong Kong-listed H-shares. ** The Shanghai stock index is below its 50-day moving average and above its 200-day moving average.

Reporting by Noah Sin, Editing by Sherry Jacob-Phillips

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