China and Hong Kong equity benchmarks closed lower on Tuesday, as investors booked profits after a rally on the mainland index, and ahead of a key U.S. central bank meeting this week that could provide clues on its policy path.
** The Shanghai Composite index 000001 was down 0.02% at 3,727.29, while the blue-chip CSI300 index 3399300 was down 0.38%.
** Hong Kong’s benchmark Hang Seng index 
HSI closed 0.3% lower, marking a fourth straight losing session.
** Analysts said market optimism, underpinned by the extension of the U.S.-China trade truce and expectations of a weaker dollar, increased inflows over the past few weeks.
** Some investors may want to cash out at the high point after the strong rally, they said.
** “The national team has a track record of selling into strength, and we believe it will continue to do the same,” Richard Tang, China strategist at Julius Baer, said in a note on Tuesday.
** Yet the private bank expects “strong return potential for the Chinese equity market into year-end”, as improving liquidity in the onshore market can offset the worsening macro narrative.
** In Hong Kong, with the benchmark Hang Seng rising over 25% this year, there has been “mild profit-taking/position-squaring” in the market, said Charu Chanana, chief investment strategist at Saxo.
** Some investors reduced their risk profile ahead of the Jackson Hole meeting and geopolitical risks, she said.
** Investors are closely watching the Fed’s Jackson Hole conference between August 21 and 23, where Chair Jerome Powell is expected to speak and could offer more clarity on the economic outlook and the central bank’s policy framework.
** By sector, semiconductors (.CSI931865) and brokers (.CSI399975) were among worst performers among mainland A-shares, down 1.9% and 1.8%, respectively.
** Mainland property developers listed in Hong Kong HHSMPI rose 0.6%, after Premier Li Qiang called for forceful measures to stop losses in the sector.
** The smaller Shenzhen index 
399106 ended up 0.11% and the start-up board ChiNext Composite index 3399006 was weaker by 0.17%.
