China stocks rise as govt calms regulation worries; HK shrugs off cyber fears | Reuters


* SSEC +0.3 pct, CSI300 +0.5 pct, HSI +0.6 pct

* Premier Li says China able to keep markets stable

* China cyber-security stocks surge after global cyber

SHANGHAI, May 15 China stocks, which had fallen
for five weeks in a row, firmed on Monday morning after the
government soothed market fears of tighter regulation, saying
risks in the banking sector were “completely controllable.”

But the upbeat sentiment – also aided by surges in
cyber-security stocks after the global cyber attack at the
weekend – was capped by China’s disappointing factory activity
and investment data that deepened worries of renewed economic

Hong Kong stocks followed Asian markets higher as investors
shrugged off threats posed by the ransomware attack, a missile
test by North Korea, and weak U.S. data.

The CSI300 index rose 0.5 percent to 3,401.53
points by the lunch break, while the Shanghai Composite Index
gained 0.3 percent to 3,092.28 points.

Chinese stocks sank to seven-month lows last week in a
five-week losing streak, as a coordinated campaign among
financial regulators against shadow banking and risky, leveraged
investments drove up market rates and dented investor

But in an apparent effort to settle market nerves, China’s
banking regulator said on Friday that risks in the banking
sector were completely controllable, and the market did not have
to be nervous of scrutiny.

In addition, Chinese Premier Li Keqiang said on Sunday that
China would strike a balance between financial stability,
gradual deleveraging, and steady economic growth, noting that
China was capable of maintaining stability in its financial

Such market-friendly language helped offset economic
concerns triggered by news that China’s factory output and fixed
asset investment growth cooled more than expected in April.

Most sectors rose on Monday, but the property sector
continued to sag amid tighter real estate curbs.

Shares of cyber-security stocks were in the spotlight after
the global cyber attack over the weekend, with more than 10
stocks in the sector, including Venustech Group,
Bluedon Information Security Technologies and
Nsfocus Information Technology jumping by the daily
10 percent limit.


The Hang Seng index added 0.6 percent to 25,301.50
points, while the Hong Kong China Enterprises Index
gained 1.2 percent to 10,409.63.

UBS pointed to signs of mainland Chinese investors
diversifying away from domestic exposure.

“We have observed southbound investors showing increased
interest in non-Chinese HK shares, which may indicate their
intent to diversify and avoid the domestic spill-over effect,”
UBS strategist Gao Ting said.

(Reporting by Luoyan Liu and John Ruwitch; Editing by Eric