* China stocks largely ignore North Korea nuclear test
* China metal shares jump on supply shortage expectations
SHANGHAI, Sept 4 (Reuters) - China stocks held steady on Monday, with investors seemingly unruffled by North Korea’s latest nuclear test, although Hong Kong shares followed regional markets lower amid heightened geopolitical tensions.
North Korea on Sunday conducted its sixth and most powerful nuclear test, which it said was of an advanced hydrogen bomb for a long-range missile, prompting the threat of a “massive” military response from the United States if it or its allies were threatened.
But Chinese equity markets, which have in the past largely ignored sabre rattling on the Korean peninsular, remained clam, underpinned by resource shares as commodity prices continue to surge.
Both the blue chip CSI300 index and the Shanghai Composite Index rose 0.1 percent by the lunch break, to 3,835.10 points and 3,371.77 points, respectively.
Investors at home and abroad appear to be increasingly optimistic about China’s economy, as they start to plough more money into the country’s stock markets, at a time when the yuan has also climbed to 14-month highs against the dollar.
Overseas investors spent a net 27 billion yuan ($4.12 billion) buying mainland shares in August via the cross-border Connect schemes, according to state media, representing the biggest monthly inflow this year. That has pushed the premium Chinese shares command over their Hong Kong peers to the highest in more than a year.
Metal stocks surged as commodity prices continued to soar on the back of Beijing’s fresh measures against pollution that will likely further reduce production capacity.
An index tracking China’s steelmakers surged more than 4 percent, after the country’s steel rebar futures jumped to their highest in four-and-a-half years, on concerns that a furnace fire might spark a new round of safety inspections and closures, tightening supply.
But Hong Kong shares, which are more vulnerable to global market swings, lost ground on Monday morning.
The Hang Seng index dropped 0.5 percent, to 27,809.54 points, while the Hong Kong China Enterprises Index lost 0.7 percent, to 11,206.95.
Reporting by Samuel Shen and John Ruwitch; Editing by Jacqueline Wong