China stocks steady as defensive shares firm; HK down on rising NKorea tension

SHANGHAI: China stocks steadied on Tuesday morning following two consecutive sessions of falls, aided by a rebound in small-caps and continued strength in consumer shares, although concerns linger over the sustainability of the economic recovery.
Hong Kong shares fell roughly one percent, as investors returning from their holiday break had their first chance to react to escalating tensions over North Korea.
China's blue-chip CSI300 index rose 0.1 percent, to 3,482.41 points by the lunch break, while the Shanghai Composite Index lost 0.1 percent, to 3,218.52 points.
Market participants, concerned about China's intense new property curbs wreaking havoc on the economy, drew some solace from data that showed accelerating home prices last month.
Average new home prices in China's 70 major cities rose 0.6 percent in March from February, higher than the previous month's reading of 0.3 percent, as the market shook off the impact of tougher cooling measures.
But many believe that China's solid economic growth in the first quarter - GDP grew 6.9 percent, the fastest pace since the third quarter of 2015 - is not sustainable. "Quite a few people believe the recent recovery in cyclical sectors marks the start of a new round of economic cycle, but it might be just a short-lived rebound in China's long period of downcycle," wrote Li Xunlei, economist at Qiu Securities Asset Management Co.