Beijing to open up financial sector as stocks continues fall amid global cue

Shanghai stocks pared most of the early losses on Thursday after Beijing vowed further opening up of its financial sectors and on some progress in the Sino-U.S. trade talks. The CSI300 index rose 0.1 per cent to 3,746.82 at the end of the morning session, while the Shanghai Composite Index was down 0.3 per cent to 3,014.83, after dropping as much as 1 per cent. There was some relief after a Reuters report said that the United States and China have made progress in all areas under discussion in trade talks, with unprecedented movement on the touchy issue of forced technology transfers.

China will allow greater market access for foreign banks and insurance companies, especially in its financial services sector, Premier Li Keqiang said on Thursday. Li's remarks, made in a speech at the annual Boao forum held on China's southern island of Hainan, added to speculation that China might soon announce new rules that will allow foreign banks and insurance firms to increase their presence in China.

The CSI300 financials index declined 0.5 per cent by the lunch break, recovering some of earlier losses. Consumer shares outperformed with a 2.1 per cent rise, led by Wuliangye Yibin climbing to a 14-month high on robust profit growth.

"Consolidation would be needed after a strong rally this year, though the valuations for the A-share market remain relatively low," Northeast Securities wrote in the report. In Hong Kong, the Hang Seng index was unchanged at 28,736.13, while the Hong Kong China Enterprises Index lost 0.1 per cent to 11,292.50.

Around the region, MSCI's Asia ex-Japan stock index was firmer by 0.08 per cent, while Japan's Nikkei index was down 1.33 per cent. The yuan was quoted at 6.7305 per U.S. dollar, 0.06 per cent weaker than the previous close of 6.7265.

The largest percentage gainers on the main Shanghai Composite index were Harbin Pharmaceutical Group Co Ltd, up 10.07 per cent, followed by Chongqing Gangjiu Co Ltd, gaining 10.05 per cent and Beijing Jingcheng Machinery Electric Co Ltd, up by 10.04 per cent. The largest percentage losers on the Shanghai index were Zhejiang CONBA Pharmaceutical Co Ltd, down 10.02 per cent, followed by China National Software & Service Co Ltd, losing 10.01 per cent and Suzhou Jin Hong Shun Auto Parts Co Ltd, down by 10.01 per cent.

So far this year, the Shanghai stock index is up 21.2 per cent, while China's H-share index is up 11.7 per cent. Shanghai stocks have risen 2.78 per cent this month. The top gainers among H-shares were Great Wall Motor Co Ltd, up 3.41 per cent, followed by Air China Ltd, gaining 3.14 per cent and SINOPHARM GROUP CO LTD, up by 2.38 per cent.

The three biggest H-shares percentage decliners were Byd Co Ltd, which has fallen 2.54 per cent, Guangzhou Automobile Group Co Ltd, which has lost 2.2 per cent and Hengan International Group Company Ltd, down by 1.9 per cent. As of 04:28 GMT, China's A-shares were trading at a premium of 21.90 per cent over the Hong Kong-listed H-shares.