SHANGHAI, April 29 (Reuters) - China stocks edged higher on Thursday, led by gains in financials on upbeat first-quarter earnings from many heavyweight companies in the sector, while some mutual funds’ high allocations to the banking sector also lent support.
** At the midday break, the Shanghai Composite index was up 0.17% at 3,463.10, while China’s blue-chip CSI300 index was up 0.25% at 5,132.12.
** The smaller Shenzhen index edged down 0.08%, the start-up board ChiNext Composite index was weaker by 0.57% and Shanghai’s tech-focused STAR50 index was down 0.32%.
** CITIC Securities Co,, China’s biggest brokerage by assets, reported a 26.7% rise in first-quarter net profit on Wednesday, led by strong growth in commission fees.
** A gauge that measures the performance of the sector, the CSI SWS securities index, was up 2.58%.
** Bank of Jiangsu hit its upward trading limit earlier in the session, after the lender said its non-performing loan ratio fell to 1.32% at end-March, the lowest level since it was listed.
** Banking shares were up after some mutual funds reportedly increased their allocation to the sector. Data showed that total market value of mutual fund holdings in banks stood at 123.39 billion yuan ($19.07 billion) at end-March, up by 73.44% from the previous quarter.
** Zhang Yiwei, analyst at China Galaxy Securities, said the higher banking allocation was underpinned by “macro economic recovery, easing pressure on profit distribution and the release of provisions”. He sees room for continued improvement in the bank sector for higher valuation.
** Chinese H-shares listed in Hong Kong rose 0.38% to 11,057.03, while the Hang Seng Index was up 0.62% at 29,251.40.
** Gains in Hong Kong was tracking its peers in the region after the U.S. Federal Reserve said it was too early to consider rolling back emergency support for the economy. ($1 = 6.4712 Chinese yuan) (Reporting by Winni Zhou and Andrew Galbraith; Editing by Rashmi Aich)