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China stocks hover near 1-year low despite fresh support measures

By Reuters News

SHANGHAI, Nov 4 (Reuters) - China stocks struggled near one-year lows on Wednesday, despite fresh government moves to support the market as investors remained cautious while bracing for news from the US midterm elections.

** The blue-chip CSI300 Index .CSI300 and the Shanghai Composite Index .SSEC were roughly flat by the midday break. Hong Kong’s Hang Seng Index .HSI was also little changed.

** China’s central bank said on Wednesday that banks have applied to borrow more than 200 billion yuan ($29.98 billion) to fund listed firms' share purchases under an upgraded re-lending scheme.

** It came a day after the People’s Bank of China conducted 100 billion yuan worth of swaps with brokers and fund companies to finance their share buying.

** They were part of measures Beijing announced late on Monday to stem a slide in a market that is among the world’s worst-performing this year.

** The CSI300 slumped 8.5% in October, its worst month since early 2016, as China's economic weakness and a tumble in tech shares hit confidence.

** Wu Weizhi, founder of Zhong Ou Rabbit Asset Management, said that it takes time for the battered market to heal after "over-crowded trades triggered a stampede" in tech stocks.

** But "there are many positive signals emerging in sectors and companies" that have tumbled a lot in value, he said in a note.

** Meanwhile, the US midterm election results could have implications ranging from Washington's relations with China to AI-related policies.

** China Galaxy Securities said Chinese companies that generate the bulk of their revenue from the US could be affected by any shifts in political winds in Washington, while the Hong Kong market would be more vulnerable to global market volatility induced by the results.

** On Wednesday, China's AI-related stocks .CSI950125.STAR100 jumped, taking cues from an overnight rebound in US chip shares.

** But the broader market was weighed down by falls in real estate .CSI000948 and telecom shares .CSI931235.

** In Hong Kong, biotech stocks .HSIDI rose, counteracting falls in tech .HSTECH and property shares .HSMPI."

($1 = 6.6701 Chinese yuan renminbi)

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