The H-shares index rose 0.65 per cent or 55.18 points to end at 8,494.49. 

Below is the one-day chart for Hong Kong stock market:  Hang Seng Index (yellow), H-share index (purple). The percentage at the end show the difference from the opening, not the previous close. Click to enlarge the chart.

3:10 pm: Mainland China's benchmark Shanghai Composite Index closed down 2.42 per cent or 73.26 points at 2,949.60, the lowest settlement since August. Meantime, the large-cap CSI300 lost 1.86 per cent or 59.83 points to 3,155.88.

The Shenzhen Composite Index slid 3.46 per cent or 64.21 points to end at 1,791.18, the worst closing level in three months. The Nasdaq-style ChiNext sank 4.09 per cent or 87.75 points to 2,059.78.

Below is the one-day chart for the Chinese stock markets: Shanghai Composite Index (orange), Shenzhen Composite Index (purple), CS1300 Index (green) and ChiNext (blue). The percentage at the end of the chart represents the difference from the opening, not from the previous close. Click to enlarge chart.

2:16 pm: The better-than-expected Chinese trade data for December supported the view that there has not been a major economic deterioration in recent months, while a large monthly trade surplus provides the PBOC with a cushion it needs in the face of soaring capital, wrote analysts at Capital Economics.

Exports fell 1.4 per cent year-on-year in US dollar terms last month, following a 6.8 per cent contraction in November, latest official statistics showed. The drop was against a previous estimate of a 8 per cent fall in exports in a Bloomberg survey of economists.

Imports declined 8.7 per cent year-on-year in US dollar terms, versus an estimated 11 per cent decline in the Bloomberg survey.

The data showed that price falls continue to weigh heavily on import values, analysts from Capital Economics said. The value of industrial commodity imports was fairly flat in December, but the jump in volume terms suggests domestic demand has strengthened, they added.

2:13 pm: The Hang Seng Index traded at 20,165.84, up 2.30 per cent or 454.08 points. The H-share index was at 8,623.87, up 2.19 per cent or 184.56 points.

2:13 pm: The Shanghai Composite Index dropped 0.52 per cent or 15.62 points to 3,007.24. The CSI300 index edged down  0.24 per cent or 7.68 points to 3,208.03.

The Shenzhen Composite Index lost 0.84 per cent pr 15.66 points to 1,839.73. The Nasdaq-style ChiNext Index declined 1.11 per cent or 23.75 points to 2,123.78.

2:12 pm: Chinese telecom stocks surged in Hong Kong, after state-owned China Telecom and China Unicom entered into a strategic cooperation agreement Wednesday. 

China Telecom surged 5.42 per cent to HK$3.5, and China Unicom jumped 4.9 per cent to HK$8.75. Bigger rival China Mobile also climbed 3.45 per cent to HK$82.4.  

1:11 pm: Hong Kong's Hang Seng Index opened Wednesday's afternoon session 2.22 per cent higher, or 437.98 points, at 20,149.74. The H-share index, which tracks Hong Kong-listed Chinese companies, traded at 8,608.77, up 2.01 per cent or 169.46 points.

1:11 pm: The Shanghai Composite Index opened the afternoon session down 0.23 per cent, or 7.09 points, at 3,015.77. The CSI300 index was at 3,214.79, down 0.03 per cent or 0.92 points.

The Shenzhen Composite dropped 0.64 per cent, or  11.81 points, at 1,843.59. The Nasdaq-style ChiNext Price Index fell 0.91 oer cent or 19.47 points to 2,128.06.

Hong Kong stocks rallied into mid-session close Wednesday, as the Hang Seng index jumped 2.38 per cent, or 468.30 points, to 20,180.15. The H-share index climbed 2.21 per cent, or 186.22 points, to 8,625.53.

Below is the midday chart for Hong Kong stock market. Hang Seng Index (yellow), H-share index (purple). The percentage at the end show the difference from the opening, not the previous close. Click to enlarge the chart.

11:54 am: Borrowing costs for the offshore yuan fell Wednesday morning, after the offshore rate bounced back amid a battle between the Chinese central bank and yuan traders.

The overnight CNH Hibor, or the Hong Kong interbank offered rate for offshore yuan, dropped to 8.31 per cent as of 11:15 am, after hitting 200 per cent Tuesday afternoon. 

Analysts warned that the fight between PBOC and yuan traders may continue in the next few months.

“The PBOC has pushed rates up to drive away currency speculators. At 200 per cent on Tuesday, many hedge funds and other investors who short sold the yuan would prefer winding up their positions to borrow the money at such a high cost,” said Joseph Tong Tang, executive director of SHK & Co.

“The offshore yuan has gone up again. But the battle between PBOC and the currency speculators would not just end there. We are going to see more battles like this from time to time in the next few months,” he said.

The PBOC set Wednesday the yuan's midprice weaker by 2 basis points at 6.5630. It was the second day that the central bank guided the currency lower.

         

11:38 am: Chinese stocks nudged lower at the lunch break, erasing early gains. The Shanghai Composite index ended the morning session down by 0.01 per cent, or 0.39 points, at 3,022.47, while the CSI 300 index closed in positive territory, edging up 0.17 per cent, or 5.44 points, to 3,221.15.

The Shenzhen Composite index dropped 0.36 per cent, or 6.63 points, to 1,848.76.

Below is the midday chart for Chinese stock markets. Shanghai Composite Index (yellow), Shenzhen Composite Index (purple), CS1300 Index (green) and ChiNext (blue). The percentage at the end of the chart represents the difference from the opening, not from previous close. Click to enlarge the chart.

11:32 am:  The Chinese yuan's "policy-induced stability" may not be long-lasting, and high volatility is the theme for the currency this year, HSBC predicted in a research report Tuesday.

The offshore yuan has recovered sharply, as USD-selling intervention by the PBOC tightens offshore liquidity, while a shrinking offshore yuan deposit pool and the suspension of some onshore-to-offshore yuan funding channels in recent months also helped, the Sino-British bank said.

"We believe China is sending a strong message to speculators and trying to stabilize RMB depreciation expectations.A narrower basis also demonstrates its commitment to full convertibility," analysts from HSBC said.

However, such periods of "policy-induced stability" in the yuan is unlikely to be long-lasting, as Chinese policymakers are embracing a more flexible exchange-rate regime, they forecast.

Below is a chart in the research report showing the dramatic tightening in offshore yuan liquidity so far this month. Source: Bloomberg, HSBC.

            

11:19 am: Shares in the two arms of Hong Kong-based Dah Shing Bank rose sharply, after they jointly announced they were “exploring strategic alternatives” for the group's life insurance operations, namely Dah Sing Life Assurance and Dah Sing Bank’s own life insurance division.

Dah Sing Financial Holdings, which owns Dah Sing Life Assurance, jumped 8.99 per cent to HK$38.80 in Hong Kong. Dah Sing Banking Group, wholly owned by Dah Sing Bank, also climbed 5.45 per cent to HK$12.78. 

11:13 am: Trading in Media Chinese International has now resumed, with shares surging 8.33 per cent to HK$1.30, after an exchange filing said Media Chinese is in talks to sell its controlling stake in One Media to an unnamed bidder.

Shares in One Media Group spiked 22.13 per cent to HK$1.49.

10:35 am: Chinese trade data for December came in better than expected, with exports in yuan-terms jumping 2.3 per cent year-on-year, and the imports falling 4 per cent, according to latest figures from China’s customs authority.

10:22 am: Hong Kong's Hang Seng index widened opening gains, rallying 1.97 per cent, or 388.22 points, to 20,099.98. The H-share index jumped 2.97 per cent, or 250.34 points, to 8,689.65.

10:22 am: The Shanghai Composite index rose 0.79 per cent, or 23.78 points, to 3,046.64, with the CSI 300 index up 1.17 per cent, or 37.60 points, at 3,253.31.

The Shenzhen Composite index gained 1.16 percentage points, or 21.52 points, to 1,876.91.

10:20 am: The PBOC may have won the battle against yuan traders, but has it won the war?

It is doubtful that the Chinese central bank can win the war, but if they do, it will be a “Pyrrhic victory” given the costs involved, wrote analysts at Rabobank.

“Heavy-handed central bank intervention is of course de rigueur in the EM (emerging-market) FX (foreign-exchange)  crises; however, it’s not foreign speculators who are the problem, it’s the local market that will determine the outcome of this fight, and capital outflows are only going to accelerate," analysts from the Dutch bank said.

"It’s no surprise that the Wall Street Journal notes that there has been a surge in demand for USD on the part of Chinese firms and individuals, that exporters are apparently delaying repatriating USD earnings, and that there is now even a USD shortage as the PBoC tries to limit all access to FX even further. This does not smack of ending well,” they added.

10:06 am: The offshore yuan was stronger than the onshore yuan on Wednesday morning, after the PBOC intervened in Hong Kong's offshore yuan markets to curb the currency depreciation.

The offshore yuan traded at 6.5753 as of 9:45 am, up 0.026 per cent from Tuesday's close, and the onshore yuan was at 6.5772, weaker by 0.1 per cent.

The offshore currency traded at a premium of 19 basis points versus the onshore yuan, marking a turnaround from Thursday when the premium was at a record high of 1,400 basis points. 

9:59 am: Footwear retailer Walker Group leapt 28.87 per cent to HK$1.25 in Hong Kong, after the company announced that its controlling shareholders were in talks to sell their 60.35 per cent stake for HK$1.23 a share to China Consume Elderly Care Holdings, a Chinese pension fund service provider.

9:57 am: Shares in Hong Kong-listed One Media Group, a subsidiary of local newspaper Ming Pao Daily, surged 14.75 per cent in early trade to HK$1.40, after the company announced in an exchange filing that its largest shareholder Media Chinese was in talks to sell its stake.

However, the potential buyer was not named in the filing, which was issued Tuesday evening.

9:52 am: Asian stocks rebounded Wednesday morning, taking a strong lead from Wall Street overnight. Tokyo's Nikkei Average climbed 2.3 per cent to 17,621.66, Sydney's S&P/ASX 200 advanced 0.9 per cent to 4,967.90, and  Seoul's Kospi Composite Index rose 1.2 per cent to 1,913.06.

9:40 am: In early trading, Hong Kong's Hang Seng index was 1.40 per cent higher, or 275.48 points, at 19,987.24, while the H-share index gained 1.86 per cent, or 157.22 points, to 8,596.53.

9:40 am: Over on the mainland, the Shanghai Composite index rose 0.64 per cent, or 19.47 points, to 3,042.33, with the CSI 300 index up 0.77 per cent, or 24.74 points, at 3,240.45.

The Shenzhen Composite index added 0.62 percentage points, or 11.49 points, to 1,866.88.

9:40 am: US stocks posted gains Tuesday night, as the Nasdaq Composite broke an eight-day losing streak and closed 1 per cent higher at 4,685.92. The S&P 500 rose 0.8 per cent, or 15.01 points to 1,938.68. The Dow Jones Industrial Average added 0.7 per cent, or 117.65 points, to 16,516.22. 

9:29 am: Investors are eyeing Chinese trade data for December due later Wednesday. According to estimates by Rabobank, exports for December fell 8 per cent year-on-year, while the imports declined 11 per cent.

Anything worse than that is likely to trigger more selling in the markets, analysts said.

9:27 am: The People’s Bank of China (PBOC) on Wednesday set the yuan's midprice weaker by 2 basis points at 6.5630, marking the second day that the central bank guided the currency lower.

The PBOC, however, set the yuan's midprice against the pound stronger by 844 basis point to 9.4946. The yuan's reference rate against the euro was also up 243 basis points to 7.1211, and its midprice against every 100 yen strengthened by 157 basis points to 5.5773.

Traders are allowed to trade up to two per cent each direction of the midprice for the day.

9:20 am: Oil futures settled significantly lower Tuesday night, with the WTI crude futures sliding 3.1 per cent,  or 97 cents, to US$30.44 a barrel in New York, marking its lowest close since Dec. 2003. The grade briefly touched an intra-day low of US$29.93 a barrel. 

Meantime, the Brent crude futures declined 2.2 per cent, or 69 cents, to end at US$30.86 a barrel, the worst closing level since April 2004. 

Both benchmarks have tumbled more than 17 per cent so far this year.

9:19 am: On Tuesday, Chinese stocks ended the choppy session in positive territory, with the benchmark bouncing back from a four-month low in the previous session.

The Shanghai Composite Index edged up 0.2 per cent, or 6.16 points, to close at 3,022.86. The index plunged 5.3 per cent on Monday to 3,016.7, the lowest settlement since September.

The CSI300 gained 0.74 per cent, or 23.49 points, at 3,215.94. The Shenzhen Composite Index added 0.39 per cent, or 7.29 points, to finish at 1,855.39. The Nasdaq-style ChiNext climbed 1.95 per cent, or 41.17 points, at 2,147.53. 

Below is the daily chart for Chinese stock markets. Shanghai Composite Index (orange), Shenzhen Composite Index (green), CSI300 Index (purple), and ChiNext (blue). The percentage at the end of the chart represents the difference from the oprning, not from the previous close. Click to enlarge chart.

9:16 am: On Tuesday, Hong Kong stocks extended a two-day losing streak, as the Hang Seng Index closed at 19,711.76, down 0.89 per cent or 176.74 points. The H-shares index finished at 8,439.31, off 0.77 per cent or 65.85 points. 

Hang Seng Index (yellow), China Enterprises Index (purple). The percentage at the end of the chart represents the difference from the opening, not from previous close. Click to enlarge the chart.

9:07 am: After being beaten down to its lowest level in more than three years on Tuesday, Hong Kong stock futures were trading higher Wednesday morning. The Hang Seng Index futures spot January contract advanced 1.40 per cent, or 274 points, to 19,971, while the H-share index futures were up 2 per cent, or 168 points, to 8,606.