(REUTERS) -- Hong Kong and China shares declined on Wednesday, led by Chinese banks after mainland media said January loan growth was less than earlier reported, but losses on benchmark indices were limited by chart supports.
The Shanghai Composite Index declined 1.1 percent, finishing at 2,268.1 points in a volatile session characterised by thin turnover. It bounced off its 14-day moving average, seen at around 2,264.5.
The Hang Seng Index reversed early gains to end down 0.3 percent at 20,333.37, after meetingresistance at its 200-day moving average at about 20,547.8. The China Enterprises Index slipped 0.4 percent.
China's official purchasing managers' index (PMI) for January beat expectations, coming in at 50.5 compared with a 49.5 Reuters consensus. That result initially spurred small gains which evaporated after a similar private survey came in under 50, the level demarcating expansion from contraction.
The China PMI figures were actually quite okay, but mainland reports on loan growth in January possibly coming below figures reported earlier hit Chinese banks, said Jackson Wong, vice-president for equity sales at Tanrich Securities.
Given the importance of financials in the Hang Seng Index, any move in that sector is bound to weigh, he said.
On Wednesday, Tencent Holdings was the top drag on the Hang Seng. The Chinese internet giant hit an intra-day, five-month high before slumping 3.2 percent as investors took profit after recent strength on Facebook's impending IPO.
Weak Chinese banks were also a major drag, with a gauge of Chinese financial stocks listed in Hong Kong down 0.7 percent. The mainland's biggest lender, Industrial and Commercial Bank of China (ICBC), lost 1.3 percent.
Total new loans by all commercial banks in mainland China during in the first 28 days of January could range from 750 billion to 800 billion yuan ($126.8 billion), the 21st Century Business Herald reported on Wednesday.
This lagged the 900 billion to 1 trillion yuan estimate that the official China Securities Journal reported on January 20.
Chinese shipping companies bucked the broader trend, helped by expectations freight rates would recover and on news of Beijing banning a giant new class of ship from its ports to protect its own ocean-freight industry.
The shipping sector's fundamentals remain grim as the global economy struggles to gain traction after a rocky 2011.
But a move by Hong Kong-based Orient Overseas Limited (OOIL) to hike rates between Asia and Northern Europe later this month boosted hopes that the worst was over. OOIL jumped 8.5 percent on Wednesday.
China's trade ministry said on Tuesday it forbid the berthing of Brazilian mining giant Vale SA's 400,000-deadweight-tonne Valemax vessels and other giant freighters.
Chinese shipping companies were among Asia's top performing stocks with China Shipping Container Lines Co Ltd surging 15.1 percent in almost five times its 30-day average volume, partly on short covering, traders said.
GROWTH-SENSITIVE SECTORS DRAG SHANGHAI LOWER
In mainland markets, financial and material stocks hit the Shanghai Composite Index the hardest as turnover stayed low. The mainland's biggest life insurer, China Life Insurance was the top drag, losing 2.3 percent.
Comments by the Chinese finance minister also weighed. Xie Xuren warned in remarks published on Wednesday that the world's second-largest economy faces downward risks in 2012, as weakening external demand cuts into export sector's growth.
Growth-sensitive stocks were also hit hard. Anhui Conch Cement lost 4.8 percent while Aluminum Corporation of China (Chalco) slipped 3.4 percent.
Cement stocks were further hit by mainland media reports that China's environment ministry is planning to launch stricter rules regarding nitrogen oxide emissions from cement plants, a policy change that an industry representative warned could wipe out a third of the industry's net profits.
Gains in January in both Hong Kong and Chinese markets have come in relatively low turnover, with interest among mainland investors particular weak after The Shanghai benchmark lost 33 percent the past two years.
China granted $600 million in quotas to foreign institutional investors in January, nearly a third of the amount awarded in 2011, reflecting Beijing's desire to boost foreign participation in its capital markets.
In Hong Kong, tepid investor interest has hit brokerages hard, with many cutting operations. Samsung Securities said on Wednesday it will suspend its fledgling brokerage business in Hong Kong and cut staff by more than half, confirming a Reuters report on Tuesday.