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China shares pare early losses, Hong Kong rebounds mildly
April 8, 2013 / 5:06 AM / 5 years ago

China shares pare early losses, Hong Kong rebounds mildly

* HSI +0.1 pct, H-shares +0.5 pct, CSI300 -0.6 pct

* China airlines rebound in Hong Kong after Friday drop

* China property weak after more reported Beijing curbs

* Prada falls after 2012 earnings disappointment

By Clement Tan

HONG KONG, April 8 (Reuters) - China share markets reopened after a holiday break on a lackluster note on Monday, as bird flu worries hit tourism-related stocks and property ones lost ground on more sales curbs.

The Hong Kong market rebounded mildly after benchmark indexes had ended last week at their lowest since Nov. 28, with Chinese banking and energy majors helping recover some of Friday’s losses.

At midday, the CSI300 of the leading Shanghai and Shenzhen listings was down 0.6 percent while the Shanghai Composite Index fell 0.7 percent.

Both had opened at their lowest since Christmas, down more than 2 percent before moving off the day’s lows. The mainland markets were closed Thursday and Friday for holidays.

The Hang Seng Index inched up 0.1 percent. The China Enterprises Index gained 0.5 percent to 10,477.2, with gains capped by chart resistance at its 200-day moving average - a technical level it closed below for the first time since mid-November on Friday.

“People are still very cautious today after the big dip in Hong Kong on Friday,” said Jackson Wong, vice-president for equity sales at Tanrich Securities. “It will be interesting to see what China data will do to lift the market from tomorrow.”

Beijing is due to start releasing a slew of monthly and quarterly economic data, starting with March inflation data on April 9 and trade on April 10 with money supply expected between April 10 and 15.

First quarter GDP growth data is due on April 15 along with industrial output, retail sales and urban investment data for March. Data last Wednesday showed growth in China’s services sector rose to multi-month highs in March.

On Monday, China airline stocks listed in the mainland fell on fears of diminished demand for air travel if the bird flu outbreak turns into a pandemic. Air China, down more than 7 percent at one point, went into the midday break off 3.4 percent.

Air China’s Hong Kong listing rebounded 5.1 percent after Credit Suisse lifted its view of the Asian airline sector to overweight, following a price tumble on Friday the brokerage saw as a buying opportunity.

That day, Air China had suffered its worst single-day loss in nearly four years in Hong Kong, plunging almost 10 percent.

Bird flu jitters were also cited for lackluster secondary housing market sales in Hong Kong over the weekend, broadly hurting the share prices of local property developers. New World Development shed 1.4 percent.

Chinese property developers were also on the defensive in the mainland after official media reported on Monday that Beijing is likely to raise down-payment requirements for buyers taking commercial loans to purchase second homes to 70 percent.

China Vanke fell 1.8 percent in Shenzhen, while Poly Real Estate shed 2 percent in Shanghai.

Shares of Italian fashion house Prada SpA tumbled 4.7 percent after its 2012 core earnings and margins disappointed despite a boost to margins through a reduced discount sales period and better distribution control.

Traders said some investors rotated into its footwear sector rival, China’s Belle International, and drove its shares up 4.1 percent from Friday’s nine-month low.

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