China stocks fluctuated in a narrow range on Thursday and finished roughly flat as positive news on the data front was offset by receding hopes for additional monetary policy support. The CSI300 index of the largest listed companies in Shanghai and Shenzhen was unchanged at 3,339.56, while the Shanghai Composite Index inched up 0.1 percent at 3,095.95 points.
Analysts said the market had already priced in positive trade data as an earlier gauge of the August official Purchasing Managers' Index (PM) indicated the country's economy was steadying. Also, chances for further monetary policy easing are getting slim. China's imports unexpectedly rose in August for the first time in nearly two years, boosted by coal and other commodities, suggesting domestic demand may be picking up and putting the world's second-largest economy on a more balanced footing. The sluggish market action came even as data showed China's imports unexpectedly rose in August for the first time in nearly two years, and exports fell at a more modest pace.
"The August official Purchasing Managers' Index (PMI) has already provided a clue that the Chinese economy is steadying," said Xiao Shijun, analyst at Guodu Securities in Beijing. The rush of funds to Hong Kong continued under the Shanghai-Hong Kong Stock Connect scheme on Thursday morning, as investors seek to front-run a similar cross-border link, between Shenzhen and Hong Kong, expected to be launched in November. The southbound quota of the Hong Kong-Shanghai Stock Connect , currently set at 10.5 billion yuan, utilised 2.67 billion, or 25.5 percent as of noon. "Chinese investors' overseas asset allocation is still too small by international standards," Lu added.
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