SHANGHAI: China stocks rebounded on Thursday morning as hopes resurfaced for index compiler MSCI to include A-shares this year, but gains were capped with more mainland money flowing into Hong Kong through trading links. Hong Kong stocks joined an Asia-wide rise inspired by a firmer Wall Street. The CSI300 blue-chip index rose 0.4 percent to 3,463.41 at the end of the morning session, while the Shanghai Composite Index gained 0.3 percent, to 3,255.13. Investors found some solace after index compiler MSCI said it was seeking feedback from market participants on whether to add Chinese A-shares to its China Index and emerging markets index. “The news is neutral, but the market does have expectation that this year is going to be the year,” said Cao Xuefeng, head of research at Huaxi Securities in Chengdu, adding China stocks were expected to be in greater demand from overseas investors once MSCI adds China’s A-shares to its indexes. Cao cautioned that China stocks would be subdued in the longer term as he saw more money flowing out of China and into Hong Kong to buy better-priced stocks. Insurance firms advanced on news that the premium income received by insurers jumped more than 30 percent in the first two months, compared with a year earlier. China Life Insurance Co Ltd and Ping An Insurance Group Co of China Ltd gained 1.4 percent and 1.9 percent, respectively, at the lunch break. But liquor makers turned bearish, bucking a broad trend, as an index tracking the sector retreated after it climbed to an all-time high in the previous session.
In Hong Kong, the Hang Seng index added 0.4 percent to 24,404.56, while the Hong Kong China Enterprises Index gained 0.7 percent, to 10,524.53. Inflows from the Shanghai-Hong Kong Stock Connect were 11.1 percent of Thursday’s daily quota by the lunch break, already above the quota of 7.8 percent used on Wednesday. Most sectors in Hong Kong gained ground, with gains led by mainland property developers. Index heavyweight Tencent Holdings Ltd was down 1.2 percent at the midday break after the tech giant reported quarterly profits of 10.53 billion yuan ($1.53 billion) on Wednesday, below the average estimate in a Reuters poll.
