Live | China Markets Live - Chinese shares end up as Shanghai flirts with 4,000; Hong Kong settles higher

Welcome to the SCMP's live markets blog. The intense volatility of recent weeks has every chance of remaining the core underlying theme of activity, especially as the roughly 1,400 shares that were suspended at the peak of the stock market rout gradually resume trading - they are likely to be prime targets for price adjustments. Meanwhile investors are increasingly focused the broader question of how this episode might affect the wider economy as many suspect the equity bubble has yet to fully deflate. We'll bring you the key levels, trading statements, price action and other developments as they happen.

4:28pm: The Hang Seng Index rose 1.3 per cent to finish at 25,224.01. The H-share Index advanced 1.23 per cent to 12,003, driven by a 6 per cent hike in auto maker GAC group.

4:22pm: Ping An moved the most money in Hong Kong today with turnover of HK$3.58 billion, improving its share price by 1.62 per cent to HK$97.40. Other China finance stocks followed: Bank of China, CCB, ICBC and China Life all posted gains of up to 2 per cent. 

Total Hong Kong turnover was thin at midsession, around HK$70 billion, and remained so, reaching HK$138 billion for the day’s trading.

4:02pm: Mainland media reports China Securities Regulatory Commission visited the Hangzhou office of software company Hundsun Technologies about its Homs system, which offers services including margin finance functions. The commission is tightening margin finance offered by non-brokerage houses blamed for adding to volatility in China's equity markets. 

3:53pm: On the Shanghai-Hong Kong stock connect today, Hong Kong investors have sold more China shares – around 5.4 billion yuan worth – than the combined buy and sell value of Hong Kong shares traded by mainland investors.

3:48pm: The Hang Seng rose 1.21 per cent to 25,203.64, with more than HK$122.5 billion worth of shares exchanged hands. The H-share index advanced 1.30 per cent to 12,012.

3:26pm: On the Shanghai and Shenzhen benchmark indices, 1767 listed companies are trading up today while just 57 are trading down.

But several red chips – Hong Kong incorporated and listed Chinese majors – have seen their share prices fall: China National Offshore Oil Corporation, China Overseas Land and Investment, China Mobile, Lenovo Group, Citic, China Everbright, China Everbright International and Brilliance China Automotive.

3:13pm: The Shanghai Composite Index increased by 2.39 per cent to finish at 3,970.39, falling back after briefly touching the psychological 4,000 point mark in afternoon trade. 

3:13pm: The CSI300 Index went up by 2.56 per cent to finish at 4211.81.

3:13pm: Shenzhen's Composite rose 4.18 per cent to 2,120.25, while ChiNext board added 5.80 per cent to 2,683.07.

3:06pm: Investor interest in COL Capital has not been held back by news of substantially decreased profits for the year. It is among the top gainers in Hong Kong, its share value rising by 32 per cent to 41 HK cents. 

Trading in shares of Value Convergence Holdings and China Financial Leasing has been halted this afternoon. VC Holdings had gained 22.7 per cent to HK$1.78 and China Fin Leasing had gained 20.1 per cent to HK$1.25.

2:57pm: "In short, what we have here in this list of “malicious” short-selling practices that Beijing is now trying to blame for the Shanghai sell-off is a set of lawyers’ fantasies that have no connection to the real world" - Jake van der Kamp, SCMP columnist

2:36pm: The Shanghai Composite Index up 2.21 per cent to 3,963.43. CSI300 Index went up by 2.37 per cent to 4,203.69. 

2:36pm: Shenzhen Composite rose 3.99 per cent to 2,116.47, while ChiNext board added 5.47 per cent to 2,674.55.

2:32pm: It’s only Monday, but this week already looks far better than last week for companies going public in Hong Kong. Zhongzhi Pharmaceutical shares are sitting at $2.38 on their first day of trading, not far below their $2.46 offer price.

2:21pm: China insurer Ping An now has the day’s biggest turnover tally in Hong Kong with HK$2.17 billion in trade. Its share price has increased by 2.24 per cent to HK$98. 

Sector counterpart China Life is also up, gaining 2.07 per cent to HK$32.10, and is sixth for turnover. It is currently rated ‘buy’ by UBS and Deutsche Bank, setting target prices of HK$38 and HK$37.10 respectively.

2:15pm: The two Macau casino stocks in the Hang Seng are leading the index’s percentage gains for the day. Galaxy Entertainment has gained 5.43 per cent to HK$35.95 and Sands China is up 4.74 per cent to $30.95. 

The good fortune is also flowing to the rest of the sector. Wynn Macau is up 6.8 per cent, MGM China is up 5.1 per cent, Melco International is up 3.5 per cent, and SJM Holdings is up 1.3 per cent.

2:12pm: A close by Shanghai over the psychological 4,000-point level would be the first time it finishes above that level since July 8. 

2:07pm: Shenzhen Composite Index jumps by 4.17 per cent or 84.91 points to 2120.17. ChiNext gains 5.51 per cent or 139.69 points to 2675.58.

2:06pm: Shanghai Composite Index traded higher at 3,993.59, up 2.99 per cent, or 115.79 points. CSI300 Index added 3.15 per cent or 129.31 points to 4,235.87.

2:04pm: Hang Seng Index stood at 24,985.16, up 0.34 per cent or 83.88 points. H-shares Index gained 1.31 per cent or 155.89 points to 12,014.44.

1:52pm: 925 of 1125 Shanghai Composite Index stocks are up; 26 are down and 174 are unchanged/suspended from trading. 868 of 1600 Shenzhen Composite Index stocks are up; 8 are down and 724 are unchanged/suspended.

1:35pm: Shenzhen Composite Index gained 4.46 per cent or 90.70 points to 2,125.96. ChiNext rose 5.69 per cent or 144.38 points, to 2,680.27.

1:33pm: Shanghai Composite Index up 3.40 per cent or 131.69  points to 4,009.49. CSI300 Index traded up by 3.56 per cent or 146.37 points to 4,252.93.

1:32pm: Hang Seng Index added 0.49 per cent or 122.16 points to 25,023.44. H-shares Index stood at 12,030.26, up 1.45 per cent or 171.71 points.

1:07pm: Shenzhen Composite Index opens afternoon business at 2116.99, up 4.02 per cent or 81.72 points. ChiNext rose 5.43 per cent or 137.77 points to 2673.66.

1:06pm: Shanghai Composite Index rises 93.90 points or 2.42 per cent to 3,971.70. CSI300 Index went up by 2.43 per cent or 99.95 points to 4,206.51.

1:03pm: Hang Seng Index opens afternoon trade at 24,948.66,  up 0.19 per cent or  47.38  points. H-shares Index stood at 11,941.26, up 0.70 per cent or 82.71 points.

12:05pm: The Hang Seng Index stands at 24,956.78, up 0.22 per cent or 55 points, at midsession closing in Hong Kong. The H-shares Index is at 11,958.68, up 0.84 per cent or 100.13 points.

11:38am: The Shanghai Composite Index is up 2.28 per cent to end the morning session at 3,966.13, and the CSI300 Index is up 2.24 per cent to 4,198.36.

The Shenzhen Composite Index has improved to 2,112.30, up 3.79 per cent, at the morning close and the ChiNext Index has lifted to at 2,664.63, up 5.08 per cent.

11:30am: The Hang Seng Index has improved to 24,982.78, up 0.32 per cent or 81.6 points. The H-shares Index has risen to 11,991.77, up 1.12 per cent or 133.22 points.

11:21am: China finance stocks are having a cautiously optimistic morning in Hong Kong. Turning over more than more than HK$500 million each, China Construction Bank, ICBC, Ping An and China Life are all up by less than one per cent, while Bank of China is up 2 per cent.  

Also in the top ranks for turnover, Tencent and China Mobile are slightly down, by 0.07 and 1.1 per cent respectively.

11:03am: The Shanghai Composite Index has gained 1.67 per cent to 3,942.74. The CSI300 Index is now up 1.44 per cent to 4,165.62. The Shenzhen Composite Index improves to 2,105.44, up 3.45 per cent. ChiNext Index is at 2,653.72, up 4.65 per cent.

11:00am: The Hang Seng Index stands at 24,896.78, down 0.18 per cent or 4.5 points. The H-shares Index improves to 11,916.88, up 0.49 per cent or 58.33 points.

10:58am: Hong Kong Exchanges and Clearing is now leading turnover in Hong Kong, a position it is accustomed to, with HK$1.23 billion. Share price is down 1.51 per cent to HK$235.6.

This morning, Goldman Sachs reiterated its assessment that the bourse operator’s stock was a ‘sell’ with target price of HK$220, while Morgan Stanley maintained it at ‘overweight’ and cut the target price to HK$307.

10:45am: Hong Kong dollar is trading at 7.7515, the upper end of the currency peg. Euro tradin against the US dollar at 1.1128, weaker by 0.30 per cent. US dollar to Japanese yen at 122.50, down by 0.21 per cent. British pound to US dollar off by 0.10 per cent to 1.5502. Australian dollar to US dollar down by 0.09 per cent to 0.7439.

10:45AM: Heng Koon How, senior currency strategist of Credit Suisse, said the US Federal Reserve chair Janet Yellen’s comments on Friday that interest rates will rise this year supported his  positive views on the US dollar.

“We remain confident that the Fed will likely start hiking rates in September and this expectation continues to support the USD. “

As for the euro, he believe it would remain weak and his 12 month forecast for EUR/USD stays at 0.99.

“The on-going Greek debt discussions have remained difficult. But we believe that the creditor instuitutions will likely offer Greece a new extensive bailout programme if the required tough reform measures are implemented rapidly,” he said. 

The recent mainland stock market volatility has not affected the outlook of the yuan which he believes will remain stable.

“Admist the mainland stock market volatility, People’s Bank of China (PBoC) has continued to hold USD/CNY’s daily fixing rate very stable around 6.1150 over the past month. This is an important message that PBoC is sending that it remains committed to keep USD/CNY stable to grow its international demand,” he said.

“Hence, we think the PBoC has not departed from its desire to maintain confidence in the on-shore yuan, push for its internationalization and eventually addition to the IMF’s SDR. This has helped to keep USD/CNY spot rate stable around 6.20 and we continue to see that going forward.” 

10:32am: The Shanghai Composite Index is up 0.65 per cent to 3,902.95. The CSI300 Index is up 0.31 per cent to 4,119.15.  

The Shenzhen Composite Index stands at 2,090.33, up 2.71 per cent. The ChiNext Index is at 2,621.26, up 3.37 per cent.

10:30am: AXA Investment Managers said in a report: 

“The Chinese stock market crash is dramatic but it’s not 1929. Its impact on the real economy will be tangible but limited.

Looking forward, there are two key questions: the most difficult but the less important is ‘by how much the market could fall further?’. The more important one is ‘what will be the impact on the economy?’.

To the first question, we answer: ‘possibly by another 20 per cent’. To the second one, we believe that the short term cost in terms of GDP growth could reach 0.3 percentage points in the second half of this year if the reaction of Chinese authorities remains shy, and less if they decide to resort to a robust mix of monetary and fiscal stimulus in order to reach their growth targets.” 

10:30am: The Hang Seng Index stands at 24,774.57, down 0.51 per cent or 126.71 points. The H-shares Index is at 11,868.08 , up 0.08 per cent or 9.53 points.

10:07am: In Hong Kong, Great Wall Motor Co is topping turnover since it resumed trading this morning, with HK$747 million in shares changing hands in the opening 45 minutes. Its share price is down 12.1 per cent to HK$33.40. 

Also resuming trading and losing out so far are Pacific Plywood, down 17.5 per cent to 47 HK cents, and Sino Golf, down 12.9 per cent to HK$1.28. 

China Success Finance Group, however, has leapt 33.6 per cent to HK$6 on its resumption of trading. Other winners rejoining the game are Ngaishun Holdings, up 30.6 per cent to 64 HK cents, and Pioneer Global, up 13.5 per cent to 19 HK cents.

10:00am: The Shenzhen Composite Index stood at 2,087.02, up 2.06  per cent. ChiNext Index opened at 2,599.26, up 2.5 per cent.

10:00am: The Shanghai Composite Index rose 0.16 per cent to 3,884.02. The CSI300 Index edged up 0.297 per cent to 4,094.37. 

10:00am: The Hang Seng Index stood at 24,680.92, down 0.88 per cent or  220.36 points. The H-shares Index was at 11,782.76 , down 0.64 per cent or 75.79 points.

9:57am: Onshore yuan is trading at 6.2085, stronger by 7 basis points from last Friday's close. The offshore yuan stood at 6.2164, weaker by 4 basis points from Friday.

9.45am: Shanghai-Hong Kong Stock Connect trade flows reveal substantial shifts over the last week, according to analysts at brokerage Jefferies.

Trading volume of Shanghai A exchange averaged 754 million yuan a day over the past week, down 7.2 per cent from the previous week. Northbound trading volume averaged 7.8 billion yuan a day, down 69 per cent week-on-week.

Overall net selling of 37 billion yuan in northbound trades marked a sharp reversal from net buying of 8.2 billion yuan in the previous week. 

9:41am: In Hong Kong, a raft of companies have announced undertakings not to sell their shares for the next six months since trading closed on Friday. Many have also said they plan to buy up shares. 

Companies implementing a six-month freeze include China Coal, Zhengzhou Coal Mining, Yanzhou Coal, Zijin Mining, First Tractor, Jingcheng Machinery, Great Wall Motor, Xiamen International Port Company, Jiangsu Expressway, Tianjin Capital, Jingwei Textile, Shanghai Pharmaceuticals and Shanghai Electric. 

Companies making more generalized commitments to avoid selling and to prop up their share value include China Merchants Bank, China Eastern Airlines, Chengdu Putian Telecommunications, Beijing North Star and, in respect of Yanjing Beer, Beijing Enterprises Holdings. 

Meanwhile, completed share buy-ups have been announced by China Oilfield Services, Zhengzhou Coal Mining, China Cosco, D&G Technology, United Photovoltaics, Harmony Auto, Guotai Junan, China Silver Group, La Chapelle and Tsingtao.

9:34am: The Shenzhen Composite Index opened at 2,087.02, up 2.5  per cent. ChiNext Index opened at 2,612.77, up 3.43 per cent.

9:30am: The Shanghai Composite Index rose 0.87  per cent to 3,911.72. The CSI300 Index edged up 0.46 per cent to 4,125.48.

9:30am: The Hang Seng Index opens at  24,709.85, down 0.77 per cent or 191 points. The H-shares Index stands at 11,793.52, down  0.55 per cent or 65.03 points.

9.30am: The People’s Insurance Company (Group) of China Ltd has bought an aggregate 3.19 per cent of Industrial Bank Co Ltd for 10.1 billion yuan ($1.63 billion) through its units, PICC Property and Casualty Co Ltd and PICC Life Insurance Co Ltd, which bought 280.74 million shares and 327.64 million shares respectively.

The deal was done on the open market using insurance funds on July 9, Reuters reports, citing a regulatory filing. The insurer held 14.06 per cent of the Shanghai-listed bank after the acquisitions, up from the previous 10.87 per cent.

9:23am: People’s Bank of China on Monday set the mid-price of on-shore yuan trading at 6.1133,  stronger by 20 basis points from the level on Friday. Traders are allowed to trade two per cent above or below the mid-price for the day.

9:10am – UBS said in a report: “Amid worries over the integrity of the Eurozone, we have also been keeping a close eye on the turbulence in China's domestic equity markets. It is too soon to say if the rally on Thursday and Friday will mark the bottom, but we believe that the volatility, at this stage, does not pose a major threat to the Chinese economy or global markets.

Chinese citizens hold just 20 per cent of their financial assets in equities, suggesting that the market slide should not have a major impact on consumption. Chinese domestic shares also account for only around 1 per cent of international portfolios. Furthermore, the Chinese authorities have repeatedly shown they are willing and able to respond quickly and flexibly to the situation.” 

9:09am: Hang Seng Index futures spot July contract at the pre-opening session trading at 24,895, down four points, or 0.02 per cent.

9:06am: Shanghai Composite Index pre-opening session down 0.013 per cent to 3,877.29. CSI300 down 0.015 per cent in pre-opening session to 4,105.94.

9:03am: A total of 213 Shanghai A-share companies said they will resume trading on Monday. They represent 63 per cent of the 338 companies who voluntarily suspended trading in their shares from last Friday. This means there are still 125 companies suspended in Shanghai on Monday, 11 per cent of the total. 

In Shenzhen, there are 146 companies who applied to resume trading on Monday. There are still 856 companies, or 50 per cent of all Shenzhen listed firms, who are on voluntary suspension on Monday. 

8.55am: FTSE China A50 futures trading up 0.22 per cent in Singapore. 

8:50am: Carl Weinberg, chief economist and veteran China watcher at High Frequency Economics says his call a week ago for the rout to stop at technical support of around 3,500 for the Shanghai Composite Index has proven correct, though he warns that while the bubble deflated, not nearly all the gas escaped.

“The floor in stocks was generated by more than just normal trader action. Regulators stepped in and shut down trading in the most volatile shares and limited short trading on all stocks with punitive margin conditions. It remains to be seen how the market holds up once all the artificial impediments to selling are withdrawn.”

8.30am: Analysts at Goldman Sachs argue that China stock markets are seeing "a correction, not a collapse" though they add that "investor confidence may take time to repair". The Goldman team cautions that mainland equities are not yet through the deleveraging cycle that triggered the violent sell-off and that H share and ADR trading is likely to be choppy until mainland flows completely unwind. Their bottom line: "Hunting time for value investors."