SHANGHAI: China stocks were mixed on Thursday morning, with weak banks countering sharp gains in small-cap plays ahead of a planned cross-border investment scheme between Shenzhen and Hong Kong.
The CSI300 index rose 0.3 percent, to 4,787.36 points at the end of the morning session, bringing this month’s gain to 18.2 percent. But the Shanghai Composite Index lost 0.1 percent, to 4,472.36 points, on track to post a monthly gain of 19.3 percent.
Banking shares sagged for the second day, after China’s biggest lenders posted their slowest first-quarter profit growth in at least six years as a cooling domestic economy squeezed lending margins and led to a jump in soured loans.
But the Shenzhen market, home to China’s listed start-up companies and small- and medium-sized enterprises was very strong, on expectation that China will soon launch the Shenzhen-Hong Kong Stock Connect programme.
UBS expects China will likely announce the timetable for the scheme in May, and kick off the project in the second half of the year. Hong Kong’s stock exchange said on Thursday the scheme still awaits regulatory approval.
Both indexes are set to gain for the third month in a row.
Wei Fengchun, chief strategist of Bosera Asset Management Co expected Beijing to further loosen monetary policies this year, so the logic of the liquidity-driven rally has not changed.
