** China's blue-chip CSI300 Index dropped 0.4% by
the lunch break, while the Shanghai Composite Index fell
0.2%. Hong Kong benchmark Hang Seng lost 0.6%.
** Investors are looking beyond companies' first-quarter
results for signs that China's economy is indeed on its feet.
** China's economic growth of 4.5% in the first quarter beat
expectations, but "favourable base effects will fade" in the
second half, while "the economy remains characterised by an
uneven pace of recovery," DBS wrote in a note to clients.
** Retail sales and production are picking up gradually; public sector investment has picked up, but private investment growth is anaemic, and the external demand outlook is uncertain, the bank said.
** The caution clouds the market, despite upgrades on China's economy from some global institutions, including BofA Global Research, J.P.Morgan, Citigroup and UBS.
** "Uncertainty on the real estate recovery is a major
factor holding back the market right now," wrote Qi Wang,
co-founder and CIO of MegaTrust Investment (HK). "I think the
market is questioning how sustainable the consumption strength
is if real estate fails to recover."
** China's tech-focused STAR Market fell 1.7%,
while consumer and materials stocks also
dropped.
** In Hong Kong, property and financial shares led the declines.
(Reporting by Shanghai Newsroom; editing by Eileen Soreng)
