Market Wrap: Hang Seng gains on bargains and banks

PUBLISHED : Wednesday, 31 October, 2012, 6:26pm
UPDATED : Wednesday, 31 October, 2012, 6:33pm

Hong Kong stocks rose for the first time after three days of decline as investors hunted for bargains in the property sector and financial shares were boosted by estimate-beating earnings for banks.

The benchmark Hang Seng Index gained 213.24 points, or 1 per cent, to close at 21,641.82. Turnover stood at HK$47.94 billion, compared with a year-to-date average of around HK$53 billion.

Property stocks gained after investors decided the recent declines caused by government measures introduced on Friday to curb property prices were excessive.

Cheung Kong (0001.HK) added 2.05 per cent to finish at HK$114.5, while New World Development (0017.HK) added 2.04 per cent to close at HK$11.98.

Industrial & Commercial Bank of China (1398.HK), China’s biggest lender, added 1.99 per cent to close at HK$5.13, after posting a 15 per cent increase. Bank of China (3988.HK) added 2.24 per cent to finish at HK$3.19.

“The big four banks have risen by 20 per cent during the past two months, so some profit taking could be expected,” said Linus Yip, strategist for First Shanghai Securities. “It’s hard to be bullish on this sector.”

The Hang Seng China Enterprise Index, which tracks the performance of Hong Kong-listed Chinese companies, gained 123.79 points, or 1.18 per cent to finish at 10,582.05.

“Investors are taking a wait-and-see attitude, looking for more indicators to see if the economy is really bottoming out,” Yip said.

China is due to report the official PMI for October on Thursday.PetroChina (0857.HK), China's biggest energy producer, lost 2.04 per cent to close at HK$10.58. The company saw net income fall 33 per cent to 24.9 billion yuan from 37.4 billion yuan a year earlier in the third quarter, its lowest quarterly profit in at least three years.