China shares have best day in weeks, Hong Kong tepid ahead of holiday

HONG KONG Thu May 16, 2013 2:47pm IST

An investor looks at an electronic board showing stock information at a brokerage house in Jiujiang, Jiangxi province April 23, 2013. REUTERS/Stringer/Files

An investor looks at an electronic board showing stock information at a brokerage house in Jiujiang, Jiangxi province April 23, 2013.

Credit: Reuters/Stringer/Files

Related Topics

Stocks

   

HONG KONG (Reuters) - China shares posted their best daily gain in weeks on Thursday, limiting losses in the Hong Kong market, as investors chased a rebound in the property and financial sectors and extended a rally in technology-related counters.

Earnings drove some of the most significant moves. Tencent Holdings (0700.HK) closed at a record high after posting robust quarterly earnings, while Parkson Group (3368.HK) sank to its lowest in more than seven years after a weak first quarter.

The CSI300 of the leading Shanghai and Shenzhen A-share listings ended up 1.8 percent in its best percentage gain since April 24. The Shanghai Composite Index .SSEC rose 1.2 percent, its best day since May 3.

The Hang Seng Index inched up 0.2 percent, while the China Enterprises Index of the top Chinese listings in Hong Kong shed 0.6 percent. With Hong Kong markets shut on Friday for a public holiday, they snapped a three-week winning streak, down 0.8 and 2.4 percent, respectively.

"It's still very much a waiting game where China policy is concerned, because the new leadership needs time to stamp its authority and set its own direction," said Larry Jiang, chief investment strategist at Guotai Junan International Securities.

"But it's inconceivable that Japan and U.S. stocks will continue to rise while ignoring China," Jiang added. At $7.8 billion, Hong Kong turnover on Thursday was its best since May 8, but is still some way off peaks seen in the first quarter.

Chinese property stocks listed in the mainland were stronger, buoyed by a report in the official Shanghai Securities News that regulators have eased some restrictions on the refinancing of firms with some investment in real estate.

China Vanke 000002.SZ jumped 5.1 percent in Shenzhen in its first gain in four days. Poly Real Estate (600048.SS) rose 4.3 percent in Shanghai after closing on Wednesday at its lowest since April 12.

There was also some respite for Ping An Insurance (601318.SS), rising 3 percent in Shanghai after closing on Wednesday at its lowest since early December. Its Hong Kong listing (2318.HK) fell 1.1 percent.

It is still down 3 percent on the week in Shanghai, roiled earlier this week by a temporary underwriting ban for its brokerage unit and a dispute between Shanghai Jahwa (600315.SS) and Ping An's trust unit, which owns a stake in the Chinese cosmetics maker.

China's foreign exchange regulator said on Thursday it granted a net $137 million in new investment quotas to overseas institutions in April, the smallest monthly amount since September 2011.

EARNINGS DRIVERS

Tencent Holdings soared 6.5 percent in its best day in 28 months after posting a 37 percent rise in first quarter profit that was broadly in line with market estimates, while tripling the number of active users for its mobile chat application.

Its Hong Kong shares were also helped by a slew of price target upgrades by several major brokerages. Bank of America-Merrill Lynch upgraded its target price by almost 10 percent on higher estimates of its games, e-commerce and mobile business.

On the other hand, Parkson Retail Group sank 8.5 percent to their lowest closing level since late January 2006 as investors punished its worsening operating leverage after same store sales growth declined 2 percent in the first quarter, while rental expenses jumped 31 percent.

Deutsche Bank analysts cut their price target for Parkson's Hong Kong listing by 23 percent, expecting negative operating leverage to linger into the third quarter this year after the company management cut its 2013 growth targets. (Editing by Sanjeev Miglani)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

Markets

REUTERS SHOWCASE

Segway in India

Segway in India

Segway’s India business pegs hope on tech-savvy Modi  Full Article 

Power Outage

Power Outage

Mumbai hit by power cuts  Full Article 

Commodities

Commodities

Gold imports, premiums to jump on festive demand - top refiner  Full Article 

Economic Worries

Economic Worries

Pakistan's promises to IMF in doubt as protests sap economy   Full Article 

Islamic Finance

Islamic Finance

Basel III deposit challenge looms over Islamic banks   Full Article 

Antitrust Probes

Antitrust Probes

U.S. business lobby says concerned China antitrust probes unfair.  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage