* SSEC -0.1 pct, CSI300 -0.1 pct, HSI flat
* Hong Kong shares supported by Chinese demand
* China consumer, producer inflation pick up to multi-year
* Analysts do not expect a sustained reflation
SHANGHAI, Feb 14 Hong Kong stocks held steady on
Tuesday morning, supported by Chinese fund flows and a firm Wall
Street, but gains were limited as investors locked in profits
after a rising streak.
China's share markets edged lower, as analysts warned that
inflation may soon reach a peak after Beijing posted
higher-than-expected consumer and producer price inflation in
The city's benchmark Hang Seng index was flat at
23,712.17 points, after rising to a four-month high on Monday,
while the Hong Kong China Enterprises Index gained 0.1
percent, to 10,265.97 points.
The market was supported by rising southbound inflows
through the Shanghai-Hong Kong Stock Connect, which used 25.4
percent of Monday's daily quota, compared with an average of
less than 11 percent in January.
"HK-listings represent a good bargain for onshore investors,
who now have limited asset classes to invest in, due to physical
property purchase restrictions onshore and the high valuations
of M&A targets offshore," said Nomura analysts in a research
note, adding that Hong Kong stocks staged a mini-rally partly
due to recent mainland demand.
Investors were also watching how forceful the Federal
Reserve chief would be in keeping alive the prospect of a
interest rate hike in March when she testifies to Congress later
on Tuesday. A trend of rising rates would weigh on the
rate-sensitive property shares but benefit the financial
sector. Both sectors made modest gains in early
Most sectors retreated by the lunch break, but an index
tracking services stocks gained 1.8 percent.
Television Broadcasts Ltd jumped 8.2 percent after
the company said it was cutting the size of a planned buyback
but lifting the offer price, as the broadcaster moved to counter
a potentially hostile investor.
Both China's CSI300 index and the Shanghai
Composite Index fell 0.1 percent at the end of the
morning session, to 3,432.24 points and 3,212.43 points,
China's consumer inflation rate in January grew the most
since May 2014 compared with the previous year, and its producer
price index rose the fastest since August 2011, both beating
market expectations and adding to signs of economic recovery.
Capital Economics analysts cautioned in a research note that
both indexes would peak soon and "hopes for a sustained
reflation in China will be disappointed."
The real estate sector inched up 0.3 percent at
Most top developers surveyed by Reuters planned to increase
their land investments in 2017, but analysts said the property
sector remained under pressure this year facing tightening
restriction and Beijing's pledge to contain asset bubbles.
Shares of Leshi Internet Information and Technology Corp
Beijing were among the best performers in the
blue-chip CSI300, rallying 4.3 percent by midday. The company's
controlling shareholder proposed awarding 20 new shares for
every 10 shares held by all investors.
(Reporting by Jackie Cai and John Ruwitch; Editing by