BEIJING, Nov 6 — Chinese stocks pared a weekly advance in Hong Kong trading on speculation recent gains were excessive relative to earnings prospects and as investors awaited a crucial US payrolls report.

The Hang Seng China Enterprises Index slid 0.8 per cent to 10,528.73 at 11:09 a.m., dragged down by energy companies and banks. PetroChina Co and China Shenhua Energy Co declined more than 2 per cent, while Industrial & Commercial Bank of China Ltd. lost 1.4 per cent.

The Shanghai Composite Index added 0.6 per cent to 3,543.06, led by technology and consumer shares. Trading volumes were 32 per cent above the 30-day average for this time of day as turnover surged after the gauge closed at a bull market yesterday.

Chinese stocks rallied this week in Hong Kong and Shanghai, led by brokerages, after the government unveiled its five-year plan to bolster the economy. The gains are also boosting valuations as earnings shrink. Trailing 12-month profits at Shanghai Composite companies have dropped 10 per cent so far this year, leaving the index with a price-to-earnings ratio of 18. While that’s still below the multiple of 25 reached at the height of the boom in June, it’s about 38 per cent more expensive than the five-year average.

“There’s clearly profit taking and the market is cautious ahead of the US payrolls data,” said William Wong, head of sales trading at Shenwan Hongyuan Group Co in Hong Kong.

“Trading is very thin in Hong Kong. China is more policy driven so the market is expecting more measures there.”

China exports

The Shanghai gauge has climbed 4.8 per cent this week, while the H-shares gauge advanced 1.4 per cent. Most of the gains came on Wednesday after the nation’s central bank unintentionally sparked a surge in stocks by publishing five-month-old comments from governor Zhou Xiaochuan that said a link between exchanges in Shenzhen and Hong Kong would start in 2015.

The first of two jobs reports due before the Fed’s December meeting is expected to show employers added 185,000 workers in October, after hiring growth sputtered in September as turmoil in global markets cooled demand for labor. Economists expect the unemployment rate to fall to 5 per cent, slightly above the 4.9 per cent rate that Fed officials estimate would satisfy their mandate for higher rates.

Energy and financial companies also dropped in Hong Kong before this weekend’s China trade data. China Construction Bank Corp. slid 2.3 per cent. China Oilfield Services Ltd. fell 1.5 per cent.

Exports probably declined 3.2 per cent in October from a year earlier, according to the median estimate in a Bloomberg survey. Overseas shipments fell 3.7 per cent in September. The data are scheduled to be released Sunday.

Mainland movers

Gauges of technology and consumer-discretionary companies in the CSI 300 jumped at least 1.5 per cent for the steepest gains among 10 industry groups. Tongfang Guoxin Electronics Co soared by the 10 per cent daily limit after the chip-making unit of state-backed Tsinghua Unigroup, announced plans to raise 80 billion yuan (RM54.268 billion) in a private placement.

China International Travel Service Corp. jumped 4.2 per cent, taking this week’s gain to 14 per cent, on a media report of a possible merger with China Travel International Investment Hong Kong Ltd.

The company said in a filing to the stock exchange yesterday it hadn’t received notice of the plan from its parent.

SAIC Motor Corp. jumped by daily limit after it resumed trading following a a plan to raise up to US$2.4 billion (RM10.337 billion) to develop its own brands and new-energy vehicles. — Bloomberg