China shares flat as market awaits central bank cues

HONG KONG: Stocks in Shanghai were little changed on Wednesday as investors awaited more signals on policy easing at home and abroad, with trade risks continuing to weigh on sentiment.

** At the midday break, the Shanghai Composite index was flat at 2,880.52 points, the blue-chip CSI300 index was down 0.1% but Hong Kong's Hang Seng Index was up by the same margin at 26,260.52.

** CSI300's financial sector sub-index lower by 0.1%, the consumer staples sector down 0.5%, the real estate index up 0.2% and the healthcare sub-index down 0.9%.

** Chinese H-shares listed in Hong Kong rose 0.4%. The smaller Shenzhen index was down 0.1% and the start-up board ChiNext Composite index was also weaker by 0.1%.

** U.S. President Donald Trump toughed his trade rhetoric on Tuesday, saying he had to confront China even if it caused short-term harm to the U.S. economy because Beijing had been cheating Washington for decades.

** Markets across Asia are placing hopes on central banks to step in and boost growth, as central bankers gather in Jackson Hole later this week.

** Traders are betting for the Fed to deliver another 25 basis point cut next month, and U.S. central bank releases minutes of its last policy-setting meeting later on Wednesday.

** In China, the People's Bank of China lowered its new lending reference rate slightly on Tuesday and kicked off interest rate reforms designed to reduce corporate borrowing costs.

** Chuancai Securities' analysts said in a note on Wednesday banking stocks are due to take a hit as their interest margins narrow and it will some time to determine if the reform will stop "high risk assets like loans to small and micro enterprises being squeezed out (of the market)".

** Kaiyuan Securities' analysts are betting on further policy support to hold up the stock market, saying in a note on Wednesday that "we can't rule out that, as we get closer to National Day (on October 1), the (country's) management will want to maintain stability."

** Around the region, MSCI's Asia ex-Japan stock index  was flat while Japan's Nikkei index was down 0.4%.

** The yuan was quoted at 7.0546 per U.S. dollar, 0.1% firmer than the previous close. ** So far this year, the Shanghai stock index is up 15.5%, but it has declined 1.8% month-to-date.

** As the midday break, China's A-shares were trading at a premium of 30.12% over the Hong Kong-listed H-shares.

** The Shanghai stock index is below its 50-day moving average and above its 200-day moving average.