China shares flat, Hong Kong trades lower as oil stocks drag

China stocks were subdued while Hong Kong markets slipped on Thursday, as lacklustre performances in oil and coal sub-indexes offset upbeat sentiment towards the property sector.

A broad risk-off mode ahead of a likely U.S. rate cut and the lack of market-moving catalysts also weighed on sentiment.

At the midday break, the Shanghai Composite index held its ground at 2,785.38 points.

China's blue-chip CSI300 index edged 0.1 per cent higher, with its financial sector sub-index up by 0.16 per cent, the consumer staples sector rose 0.3 per cent and the healthcare sub-index gained nearly 1 per cent.

The real estate sub-index jumped 1.71 per cent following a report that Chinese regulators have proposed reducing rates on outstanding mortgages nationwide by a total of about 80 basis points to ease homeowners' burden.

Concerns over weakening oil demand dragged China- and Hong Kong-listed energy stocks lower. Hong Kong's Hang Seng Mainland Oil & Gas Index dropped more than 3 per cent to suffer the most significant losses.

Chinese H-shares listed in Hong Kong fell 0.87 per cent to 6,080.59, while the Hang Seng Index was down 0.46 per cent at 17,376.86.

The smaller Shenzhen index was up 0.45 per cent, the start-up board ChiNext Composite index was higher by 0.78 per cent and Shanghai's tech-focused STAR50 index was up 0.67 per cent​.

Around the region, MSCI's Asia ex-Japan stock index was firmer by 0.33 per cent while Japan's Nikkei index was down 1.14 per cent.

The yuan was quoted at 7.1006 per U.S. dollar, 0.17 per cent firmer than the previous close of 7.1125.