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China and Hong Kong stocks pulled back on Thursday morning, joining volatile regional markets after losses on Wall Street, as investors took profit following a sharp rally in the past two days.
But there were few signs of panic selling, as Chinese Premier Li Keqiang reassured global markets on Wednesday that Beijing can keep its economy on track and stock markets in check.
Analyst said August inflation data published on Thursday, which shows persistent weakness in producer prices, had little impact on the market.
China’s blue-chip CSI300 index fell 0.9 per cent to 3,370.09 points at lunch time, while the Shanghai Composite Index lost 1.0 per cent to 3,211.93 points. On Tuesday and Wednesday combined, both indexes gained about 5 per cent.
Hong Kong’s Hang Seng index, which on Wednesday jumped 4.1 per cent in its best one-day performance in nearly four years, lost 2.1 per cent on Thursday morning to 21,665.92 points.
The Hang Seng China Enterprises index, which tracks Chinese companies listed in Hong Kong, also fell 2.1 per cent.
“Relatively calm morning session dominated by some profit-taking after the recent rally in the market,’’ Gerry Alfonso, director of Shenwan Hongyuan Securities Co., wrote about mainland exchanges.
“The economic figures were mixed and had a relatively small impact on the market.’’
Other main markets in the region also retreated on Thursday morning, following a correction in US stocks. Japan’s key indexes sank over 2 per cent.
Wendy Liu, chief equity strategist of Nomura, said investors had been overly pessimistic on China stocks, and now is the time to start bargain hunting.
“When everyone is bearish, and unwilling to put money into stocks, we should turn a bit bullish,’’ Liu said, adding that she expects an uptrend in China stocks that could last until early next year.
But most sectors corrected on Thursday, with only banking and healthcare sectors ending morning trade in positive territory.
Brokerages underperformed, impacted by forecasts for lower trading volumes.
In Hong Kong, all major sectors were down at midday.
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