* SSEC flat, CSI300 +0.1 pct, HSI +0.5 pct
* Risk appetite curbed by liquidity concern, geopolitical
* ZTE jumpa in Hong Kong after settling charges brought by
SHANGHAI, March 8 China stocks struggled to make
headway on Wednesday morning, as small-caps corrected amid
lingering concerns over tighter liquidity.
But Hong Kong shares were on track to rise for the third
straight day, inspired by a second-day surge in mainland
developers, as well as a jump in ZTE Corp after the
Chinese telecom equipment maker settled with the U.S. government
on charges in connection with exports to Iran and North Korea.
China's upbeat monthly trade data, which came during China's
midday trading break, added some fuel to the Hong Kong market.
Both China's blue-chip CSI300 index and the
Shanghai Composite Index ended the morning session
roughly flat, at 3,456.00 points and 3,243.75 points,
After an early-week rally led by technology shares,
investors started to focus on longer-term factors such as
liquidity situations and regional stability, while continuing to
digest news flows from the annual meeting of China's
China's leaders pledged at the meeting to contain the
financial risks from a rapid build-up in debt, and the central
bank has moved from a loose monetary stance to a tightening bias
to discourage speculative investments.
Hedge fund manager Zhang Kaihua said a possible U.S. rate
hike next week "may prod China to tighten liquidity and increase
Indeed, China's central bank drained a net 20 billion yuan
from the interbank market via open market operations on
Wednesday amid expectations of further tightening ahead, and
investors gave lukewarm response to news that China's foreign
exchange reserves unexpectedly rose above $3 trillion in
Risk appetite has also been reduced by rising geopolitical
tension as the United States started to deploy the first
elements of its advanced anti-missile defence system in South
Korea on Tuesday after North Korea's test of four ballistic
Chinese Foreign Minister Wang Yi on Wednesday urged Seoul to
halt the deployment, saying South Korea is making a mistake.
"The international situation is getting very complicated. As
a fund manager, you need to prepare for the worst," Zhang said.
Technology-heavy start-up board ChiNext dropped
0.4 percent, erasing some of the gains earlier this week, but
infrastructure and property shares took
the baton, both rising over 1 percent.
In Hong Kong, the Hang Seng index added 0.5 percent,
to 23,800.00 points, while the Hong Kong China Enterprises Index
gained 0.8 percent, to 10,309.05.
ZTE shares jumped 5 percent, after it agreed to pay $892
million and plead guilty to criminal charges for violating U.S.
laws that restrict the sale of American-made technology to Iran
and North Korea.
An index tracking Chinese property shares surged
2.6 percent, after the previous day's 2.8 percent gain.
(Reported by Samuel Shen and John Ruwitch; Editing by Richard