China stocks steady as strong industrial profits temper slowdown fears

Shanghai: Chinese stocks held steady on Wednesday, bolstered by strong gains in resources shares after upbeat industrial profit data and a robust earnings forecast by a major steelmaker helped to ease worries about slowing economic growth.
Investor confidence was also underpinned by signs of further restructuring in the bloated state sector, and a conviction that Beijing will safeguard market stability ahead of a highly sensitive Communist Party Congress next month.
The blue-chip CSI300 index ended little changed at 3,821.20 points, while the Shanghai Composite Index was also flat at 3,345.27 points.
Profits at China's industrial companies rose 24 per cent in August from a year earlier, accelerating from the previous month.
Though much of the gain was chalked up to higher commodity prices, analysts said it also suggested that demand remains healthy despite an expected loss of economic momentum following a robust first half.
Reflecting that trend, Anyang Iron & Steel Inc forecast a seven-fold jump in net profit for the first nine months, boosting its Shanghai-listed shares by 10 per cent — the maximum allowed.
Investors also harboured hope that listed firms will benefit from stepped-up reform of state-owned enterprises in China.
The Shanghai Securities News reported on Tuesday that Ping An Insurance Group Co of China is in discussion with China Eastern Group regarding the latter's plans for mixed-ownership reform.
Ping An's Shanghai-listed shares fell but their Hong Kong counterparts saw modest gains.
Meanwhile, state-owned CSSC Offshore & Marine Engineering surged in Hong Kong while its Shanghai shares were suspended from trading, pending its controlling shareholder's reform plans.
Resources firms, the biggest beneficiary from industry consolidation and state reform, rose sharply, with the CSI300 materials subindex up 0.8 per cent.
Banking shares dragged, with Jiangsu Changshu Rural Commercial Bank slumping more than 5 per cent to a near one-year low, pressured by more equity supply as some investors come out of lock-up periods, allowing them to sell their shares.