Chinese stocks were flat on Tuesday morning after a five-day rally as profit-taking capped the gains in engineering and machinery companies, which rose after Beijing encouraged infrastructure firms to invest abroad.

The Shanghai Composite Index was flat at 2,430.0 points by the midday break, while the CSI300 of the leading Shanghai and Shenzhen A-share listings remained unmoved.

“The index met with strong profit-taking pressures, but I think it could correct in the near team,’’ said Zhang Qi, an analyst at Haitong Securities in Shanghai.

Infrastructure shares

Shares in infrastructure firms were the biggest gainers, with market players pointing to recent moves by Beijing to encourage investment in overseas infrastructure projects, akin to the post-World War Two reconstruction effort or “Marshall Plan’’ for China.

XCMG Construction Machinery Co Ltd and Shanghai Zhenhua Heavy Industry Co Ltd both hit their 10 per cent daily limit.

Shipping stocks

Mainland shipping shares were also strong after China issued further guidance to support and modernise its shipping industry, saying it would encourage mergers and private investment as well as develop its cruise industry.

China Shipping Haisheng Co Ltd jumped to its 10 per cent daily limit, while COSCO Shipping Co Ltd gained 3.7 per cent.

Mainland financial shares were weak on Tuesday, with China Everbright Bank Co Ltd dropping 2.0 per cent and China Minsheng Banking Corp Ltd losing 1.2 per cent.

Hong Kong shares

Hong Kong shares finished higher in the morning, underpinned by a positive outlook for reform of China’s state-owned firms.

By midday, the Hang Seng Index was up 0.2 per cent at 23,959.79 points. The Hang Seng China Enterprises Index of the top Chinese listings in Hong Kong rose 0.6 per cent.

Analysts said investors were focusing attention on undervalued Chinese listings rather than specific sectors on the Hong Kong market, which could benefit as confidence rises over Beijing’s policies towards future reform of state-owned enterprises.

“People would rather buy stocks with P/E (price-to-earnings) ratios below 1 than speculating on which sector will get a boost following SOE reform,’’ said Shih Wenbien, stock strategist at Yunta Securities in Shanghai.

Casino shares led morning gains with Galaxy Entertainment climbing 1.4 per cent, Sands China Ltd rising 0.7 per cent, and Wynn Macau edging up 0.2 per cent.

Other gainers included Hong Kong’s banking and telecom sectors. Bank of Communications advanced 1.0 per cent, China Mobile Ltd rose 1.0 per cent and China Unicom Hong Kong Ltd rose 1.2 per cent.