HONG KONG: Hong Kong shares drooped while those in Shanghai edge up by the midday break in a muted reaction to separate Chinese policy announcements as punters digested the implications for a market which has rallied to its loftiest in seven years the past few weeks.
The Hang Seng Index fell 0.29 per cent or 81.52 points to 27,571.6 points, pinned in a band between 27,474.73 and 27,770.75. The trading range was even narrower than the 350-point band seen on Friday.
The Hang Seng Index closed above the 28,000-point level on April 13, a record top.
The Shanghai Composite Index rose 1.03 per cent to 4,331.28 points, after fluctuating between 4,238.44 and 4,352.727. The noon closing of the Shanghai Composite Index was the highest since 2008, when the global financial crisis struck.
On Sunday, PBOC announced a 1.0 percentage point reduction in the reserve requirement ratio (RRR) to 18.5 per cent, following a 0.5 per cent percentage point cut on February 4 and two interest rate cuts since last November, bolstering liquidity an estimated 1.2 trillion yuan.
Last Friday, Chinese regulators announced that fund managers would be allowed to lend shares for short selling, while some margin trading would be banned. But on Saturday, the China Securities Regulatory Commission (CSRC) moved to allay market fears of a clampdown, saying on its microblog that the measure was not intended to encourage short selling, nor depress the market.
