Hong Kong stocks end higher, lifted by bullish corporate earnings
Hang Seng Index advances 0.9 per cent to close at 27,401.7
Hong Kong stocks rose for a second day on Tuesday on optimism about corporate earnings as China Overseas Land & Investment climbed on solid first-half profit and China Life Insurance gained ahead of its interim report due later this week.
The Hang Seng Index gained 0.9 per cent, or 247 points, to 27,401.7. The city’s benchmark is heading for its biggest gain in a week. The Hang Seng China Enterprises Index, or the H-share gauge, advanced 1.9 per cent to 10,954.9.
“The previous correction in the market has basically been finished and investors’ sentiment seems quite positive now,” said Alex Wong Kwok-ying, director of Ample Finance Group.
He said the market will likely continue its uptrending cycle, but gains will be drawn out.
“It’s not like we are going to see the Hang Seng Index breach the 28,000 threshold tomorrow, it will happen over a very long course,” he said.
Investors have been shifting focus to corporate earnings after signs of stabilisation in China’s economy and lower valuations, spurring a 25 per cent advance in the Hang Seng Index this year. The 25 Hang Seng constituent companies that have already released first-half earnings posted an average of 15 per cent profit growth, compared with a 3 per cent decrease for the previous six-month period, according to data compiled by Bloomberg. Fourteen companies on the gauge including China Life are due to release interim reports this week.
Among the biggest winners, China Overseas Land jumped 3.7 per cent to HK$26.5, as the company said Monday evening net income rose 25 per cent from a year earlier on increased sales.
China Resources Land gained 2.8 per cent to HK$23.7 and Cheung Kong Property Holdings rose 1.3 per cent to HK$68, while China insurers such as China Life also gained on expectations of strong earnings results due later this week.
Mainland shares closed mixed as a gauge of consumer staples such as pricey liquor led the losses, after a decree from the Guizhou government, where the Kweichow Moutai Co is based, stipulating that liquor would be banned at all government functions starting next month. Kweichow Moutai closed down 0.6 per cent to 487 yuan.
Liquor makers Luzhou Laojiao Co fell 1.6 per cent to 55 yuan and Wuliangye Yibin declined 2.6 per cent to 54 yuan.
The Shanghai Composite Index added 0.1 per cent to close at 3,290.2. The CSI 300 Index of large companies advanced 0.3 per cent to 3,752.3.
China United Network Communications jumped by its10 per cent daily limit for a second straight day, accounting for more than a third of the gain on the Shanghai Composite.