China stocks muted ahead of Lunar New Year holidays

BEIJING: China stocks were muted on Thursday, with trading volumes sliding ahead of the Lunar New Year holidays, while some funds booked profits after a recent rally driven by China's economic reopening cheer.

** China's blue-chip CSI 300 Index edged up 0.2% by the end of the morning session, and the Shanghai Composite Index added 0.1%.

** Hong Kong's Hang Seng Index was almost flat, while the Hang Seng China Enterprises Index slipped 0.2%.

** Other Asian stocks struggled to make headway, after weak U.S. consumer data stoked recession worries.

** Chinese drugmakers rushed to make anti-fever medicines and other treatments for COVID-19, after President Xi Jinping said he was worried about an influx of holiday travellers to rural areas ill-equipped to deal with sudden outbreaks.

** Healthcare shares jumped 2.8% to lead the gains, while information technology added 1.8%.

** The week-long holiday officially starts on Jan. 21, and economists are scrutinising the holiday season for hints of a consumption rebound in the country.

** Separately, a Reuters survey showed that China is expected to keep benchmark lending rates unchanged for a fifth month in January.

** "Both active managers and asset owners tend to believe the initial phase of the market rally post a trough is almost done, and they were either taking some profits via selling ETFs or rotating from China offshore to onshore," said Morgan Stanley in a note.

** China's CSI 300 benchmark had surged 18% since end-October, the recent trough, while Hong Kong's Hang Seng benchmark had jumped nearly 50% on bets China would lift COVID curbs.

** Morgan Stanley analysts added most hedge fund managers were keen to continue exploring investment opportunities in the market and only thinking of where to rebalance but not when to sell, believing "the market will soon transit to be more driven by fundamental-related factors".

** Tech giants listed in Hong Kong lost 1.1%, with short video operator Kuaishou Technology declining 5.1% after key shareholder unloaded HK$3.78 bln ($482.99 mln) shares.