Shanghai stocks flat, HK ticks higher on hopes of fiscal boost

Shanghai's benchmark stock index was roughly unchanged at midday on Friday, while Hong Kong shares edged up, according to Business Recorder. Investors remained hopeful about further government spending at home but were also waiting for fresh direction from overseas markets after a recent sell-off in global bonds. The Shanghai Composite stood at 3,903.81 points, and the CSI300 gained 0.52%.

Vice Finance Minister Liao Min said on Friday that China would roll out more fiscal steps as economic conditions shift, with growth losing pace in the world's second-biggest economy. Data for July, covering industrial output, retail sales and credit lending, showed weak domestic demand that has persisted. Wee Khoon Chong, an APAC macro strategist at BNY, said the economy was still finding it hard to gain momentum, and that the muted market response indicated expectations for policy support were already high.

The Hang Seng in Hong Kong rose 0.7%, while the city's tech shares added 0.5%. Non-ferrous metal stocks led gains in morning trade, with their sub-index up 1.9% as gold prices climbed on a weaker dollar and a US Treasury bond buyback. Attention now turns to Kevin Warsh, the Federal Reserve chairman, whose Jackson Hole speech next week is expected to offer clues on how he plans to handle elevated inflation. The surprise US Treasury buyback did little to ease worries about inflation and widening government debt.