China shares steady as bullion stocks rise; insurers weigh on Hong Kong

SHANGHAI: Mainland China stocks traded largely steady on Thursday, with higher gold prices boosting bullion-related shares and offsetting a pullback in technology stocks, while insurers weighed on Hong Kong equities.  

At the midday break, the benchmark Shanghai Composite index held its ground at 3,878.92 points, while the blue-chip CSI300 index eased 0.4%.

Technology shares tracked their regional peers and slipped in morning deals.

The tech-focused STAR50 index lost 0.2%, while the startup board CHINEXT composite index dropped 0.5%.

Higher gold prices helped offset weakness in tech stocks, with spot gold hitting a seven-week high on a softer dollar and lower Treasury yields on optimism over the reopening of the Strait of Hormuz.

The CSI non-ferrous metals sub-index gained 0.7%.

The latest round of tit-for-tat Sino-US measures renewed trade and technology tensions, though market impact was limited.

“Both economic and geopolitical superpowers are set on minimising their technological dependencies on the other and we are, therefore, locked into an ongoing global technological schism,” said William Bratton, head of cash equity research for APAC at BNP Paribas.

In Hong Kong, the benchmark Hang Seng index fell 1.8%, while the city’s technology shares were down nearly 2%.

Insurers led losses in Hong Kong after Caixin reported China’s mainland tax authorities are levying taxes on insurance policy income earned offshore.

Shares of Prudential plunged 5.8% and AIA Group plummeted 8.8%.

Market participants will focus on trade data, due on Friday, for signals on the strength of China’s economy.

“China’s ‘two-speed’ economy is not merely an economic phenomenon, but a deliberate outcome of the ‘Just Enough’ rule, under which policymakers provide just enough stimulus to meet the growth target,” said Larry Hu, chief China economist at Macquarie.

“The ‘Just Enough’ rule implies that if the strong track (exports and manufacturing) is strong, policy support for the weak track (consumption and property) will remain restrained.”