China stocks edge up on likely safe-haven flows amid regional weakness

Reuters08-08

(Updates to market closing levels)

SHANGHAI, Aug 8 (Reuters) - China stocks rose slightly on Thursday, bucking weakness in broader Asian markets, as some investors likely saw the Chinese market as a safe haven despite a faltering economic recovery.

Tech shares led a selloff in stock markets around Asia, while the yen and U.S. bonds rebounded, as global investors struggled to find their footing in a wild week for markets.

"We think a deep correction in the Japanese market has limited impact on China's A-shares," analysts at Shanghai Securities said in a note.

"Funds are expected to flow back into A-share. We believe that increased uncertainty in the overseas market and increased expectations of a recent interest rate cut by the Federal Reserve may prompt funds to seek safe havens."

China's yuan was also slightly firmer against the U.S. dollar on Thursday, in tandem with a stronger Japanese yen, improving sentiment for the stock market.

The rise came even after China's exports grew at their slowest pace in three months in July, missing expectations and adding to concerns about the outlook for the manufacturing sector.

** At the close, the Shanghai Composite index was largely flat at 2,869.90.

** The blue-chip CSI300 index was up 0.04%, with its financial sector sub-index higher by 0.27%, the consumer staples sector up 1.24%, the real estate index up 0.86% and the healthcare sub-index

up 0.38%.

** The smaller Shenzhen index ended down 0.12% and the start-up board ChiNext Composite index was weaker by 0.545%.

** At the close of trade, the Hang Seng index was up 13.97 points or 0.08% at 16,891.83. The Hang Seng China Enterprises index rose 0.14% to 5,941.47.

** The sub-index of the Hang Seng tracking energy shares

rose 0.5%, while the IT sector rose 0.21%, the financial sector ended 0.1% higher and the property sector rose 0.47%.

** Around the region, MSCI's Asia ex-Japan stock index

was weaker by 0.38%, while Japan's Nikkei index

closed down 0.74%.

(Reporting by Shanghai Newsroom; Editing by Varun H K and Eileen Soreng)

((Jason.Xue@thomsonreuters.com;))

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