SHANGHAI: China stocks were flat on Friday morning, with investors giving a cool reception to economic and investment policies from the country’s annual parliamentary meeting and staying sidelined ahead of a widely expected U.S. rate hike next week. Hong Kong shares were also sluggish, as a second day of weakness in energy and raw material shares curbed risk appetite. The CSI300 index rose 0.1 percent, to 3,430.20 points by the lunch break, while the Shanghai Composite Index was unchanged at 3,215.88 points.
The meeting of the National People’s Congress (NPC) has so far failed to deliver policies that exceed market expectations, analysts said, prodding some investors to reduce their holdings as liquidity conditions will likely get tighter. “Due to recent market fluctuations, some investors have decided to leave the market, resulting in higher selling pressure,” said Qian Qimin, analyst at SWS Research, warning that further correction is likely if there’s no good news ahead. From a technical point of view, the Shanghai market is also in a downward trend, Qian said. China’s central bank governor said during morning trading hours that making monetary policy neutral will help China’s supply-side reforms, reinforcing expectations that liquidity will be relatively tight.
