Article Highlights

  • SSEC -0.7 pct, CSI300 -0.5 pct, HSI +0.3 pct
  • Some listed firms jump on Qihoo's Shanghai listing plan
  • China service sector sees modest growth in Oct -Caixin PMI
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Shanghai stocks were on track to close at one-month lows on Friday, as anaemic growth in China’s service sector in October broadened worries of an economic slowdown, prompting selling in almost all major sectors.

Sentiment was different in Hong Kong, where investors were relieved by the appointment of a centrist at the helm of the U.S. Federal Reserve.

China’s blue-chip CSI300 index was down 0.5 percent, to 3,977.44 points at the end of the morning session, while the Shanghai Composite Index had lost 0.7 percent, to 3,358.42 points.

A private survey showed on Friday that activity picked up slightly in China’s services sector in October but growth remained modest and much weaker than historical trends.

The findings, together with other private and official business readings this week, are likely to reinforce views that the economy will slow down in the fourth quarter after racing ahead earlier in the year.

Yang Yewei, strategist at Southwest Securities, forecast that China’s economy, which expanded 6.8 percent in the September quarter from a year earlier, will decelerate to 6.6 percent in 2017’s final three months, and to 6.5 percent in the first quarter of 2018.

He cited the government’s anti-pollution campaigns, slowing property investment and the prospect of tighter liquidity as factors.

Investors sold shares nearly across the board, with resources, real estate and industrial firms among the biggest casualties.

Bucking the trend, companies that directly or indirectly participated in Qihoo 360 Technology’s privatisation scheme surged after the announcement of a Shanghai backdoor listing plan by the anti-virus software maker previously listed in the U.S.

Companies seen benefiting from the Shanghai listing plan include Citic Guoan, Hunan TV & Broadcast Intermediary and Zhongnan Red Cultural Group .


Stocks in Hong Kong rose slightly in morning trading.

The Hang Seng index added 0.3 percent, to 28,606.15 points, while the Hong Kong China Enterprises Index gained 0.1 percent, to 11,606.19.

Bearishness from mainland markets was offset by overnight strength on Wall Street, and on news that Fed Governor Jerome Powell will become the new head of the U.S. central bank, signalling policy continuity.