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Chinese shares eke out gain as volatility drops

Hong Kong - Chinese equities swung between gains and losses for much of the day, with some energy companies declining amid a drop in crude prices and consumer stocks eking out a gain.

The Shanghai Composite Index closed 0.1% higher, after gains of as much as 0.5% and losses of 0.3%. Hualan Biological Engineering rallied more than 4%, leading a gauge of healthcare stocks higher, while measures of energy and telecom stocks declined. The Hang Seng Index in Hong Kong dropped for a second day after entering a bull market last week.

Trading volume on the mainland was 21% below the 30-day average, with a measure of 10-day volatility dropping to a two-year low. The moves come after Group of 20 finance chiefs signaled escalating concern about a wave of anti-globalization sentiment. Following a two-day meeting in Chengdu city, they emphasized fiscal and structural policies to boost growth, and renewed a pledge to promote inclusiveness.

“Traders may be waiting for new economic leads on China,” said Bernard Aw, a strategist at IG Asia Pte in Singapore. “This week is very light on China data, so I expect Chinese indexes to remain in a holding pattern until next week, when we have some PMI releases.”

The National Bureau of Statistics will likely report another month of growth in industrial profits for June, Bloomberg Intelligence said before data due on Wednesday. A gauge of manufacturing probably remained at 50, the dividing line between expansion and contraction, according to a Bloomberg survey. The figures are scheduled to be released on August 1.

The Shanghai Composite finished the day at 3 015.83. The Hang Seng China Enterprise Index fell 0.3% as of 09:31, while the Hang Seng Index lost 0.2%. Hualan Biological advanced 4.4% to its highest close in more than a year.

A gauge of healthcare stocks added 0.9%, the most among industry groups on the CSI 300 Index. Consumer-staples companies rose 0.5%, while Kweichow Moutai climbed 1.1%. China Shenhua Energy fell 1.3%. In Hong Kong, Dongfeng rallied 4.5% after Credit Suisse said its Honda raised its 2016 sales target by 11% to 500 000 units.

Developers in Shanghai rebounded from last week’s 1.9% slump as Poly Real Estate Group advanced 1.7% after National Development and Reform Commission’s investment department head said that home sales volume is expected to grow at a relatively high speed.

A total of 14 companies will raise as much as 12 billion yuan via initial public offerings, China Securities Regulatory Commission said in a statement on July 22. Seven companies will be listed on the Shanghai Stock Exchange with the others in Shenzhen, it said.

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