China Oct factory output rises at weakest pace in 4 mths -survey
Hong Kong stocks, like many in Asia, rise; China flat on tepid factory survey
01 Nov 2017 - 9:24
SHANGHAI: Hong Kong stocks followed Asian markets higher on Wednesday morning on the back of solid economic growth globally, but China shares were roughly flat, with risk appetites curbed by a sluggish factory output survey.
The Hang Seng index added 0.5 percent, to 28,395.64 points at the lunch break, while the Hong Kong China Enterprises Index gained 0.8 percent, to 11,596.72.
Sentiment was bullish as Asia shares hit a 10-year high amid signs of sustained recovery in global economies.
U.S. consumer confidence jumped to a near 17-year high in October, with households upbeat about the labour market and business conditions, which could underpin consumer spending and boost the economy in the final three months of the year.
Recovery in Europe is also picking up momentum.
Most sectors rose in Hong Kong, with IT and telecom shares leading the gains.
But investor sentiment in China is more subdued.
The blue-chip CSI300 index was unchanged at 4,006.37 points, while the Shanghai Composite Index gained 0.2 percent, to 3,399.36 points.
Caution prevailed as a private survey showed on Wednesday that China's manufacturing output rose at the weakest pace in fourth months in October and companies continued to shed staff despite a slight pick-up in domestic and export orders.
The Caixin report, which followed a similar official survey on Tuesday that pointed to an unexpected slowdown in China's manufacturing sector, reinforced concerns about China's economic recovery losing steam.
"We expect growth momentum to weaken in the coming months as the drags from slower credit growth, reduced fiscal support post-Party Congress and the environmental crackdown all intensify," Julian Evans-Pritchard, China economist at Capital Economics, wrote.
The banking sector fell 0.7 percent while consumer stocks corrected following recent strength.
But resources shares rose. Steel giant Baoshan Iron & Steel Co Ltd climbed 2.6 percent after posting a near doubling in nine-month profit.