Hong Kong Stocks Mixed After China Inflation, Trade Data

Hong Kong: China stocks rose on Monday on possible restructuring among major shipping firms and in other key sectors, and on hopes that less volatile trading may soon convince fund managers to get off the sidelines and put billions in cash back to work.

The merger speculation, which Bloomberg News said comes as part of a broader overhaul of inefficient state-run companies designed to bolster growth, outshone weak economic data released over the weekend.

The Shenzhen Composite Index, which tracks stocks on China’s second exchange, gained 4.65 percent, or 101.25 points, to 2,278.40.

“China’s economic indicators are not very good which means monetary policy will continue to be accommodative”, said Du Changchun, an analyst at Northeast Securities in Shanghai.

The global forecast for the Asian markets suggests mild consolidation as Friday’s highly anticipated U.S. monthly jobs data was widely seen as strong enough to support an increase in interest rates in September.

The Hong Kong stock market has finished higher in two of three trading days since the end of the two-day losing streak in which it had given away more than 230 points or 0.9 percent.

China is planning to combine two major state-owned shipping companies – China Ocean Shipping (Group) Co., known as Cosco, and China Shipping (Group) Co. – or merge some of their businesses, Bloomberg News reported, quoting people familiar with the matter.

Shipping, railway and cement counters were the main outperformers last week, driven mainly by expectations of policy support, GF Securities Research said in note on Monday.

The CSI 300 Index rose 2 per cent. The Hang Seng Index slipped 0.7 per cent. Trading volumes in the Shanghai Composite were 15 per cent lower than the 30-day average for this time of day.

Stocks tumbled as much as 30 percent at one point in early summer on panic selling, but have started moderating in recent weeks.

Among the actives, Digiwin Software and Jiangsu HopeRun Software both were among the many companies that surged by the 10 percent daily limit, while Datang Telecom Technology climbed 6.85 percent and China Unicom jumped 2.11 percent.