Hong Kong shares edge up, led by retailers; mainland down

Hong Kong shares rose slightly on Wednesday, with retailers gaining ground after strong results from cosmetics firm Sa Sa International.

Gains for overseas stock markets on an improving global economic outlook, in particular a stronger-than-expected rise in German investor sentiment, also helped buoy the market.

The blue chip Hang Seng Index gained 0.3 per cent to 23,201.92 by the midday break. The index has largely traded between 23,100 and 23,400 after marking its highest level in nearly two years in early February.

The China Enterprises Index of the top Chinese listings in Hong Kong rose 0.5 per cent.

Shares in Sa Sa surged 5.5 per cent to a record high after the firm posted 30 percent year-on-year growth in its retail sales in Hong Kong and Macau during the February 10 to 16 Chinese New Year and 20 per cent growth in same store sales.

“The strong performance (from Sa Sa) suggested that consumer sentiment was improving and that fuelled investors’ interest to put a bet on those which can benefit from the improved spending sentiment of mainland tourists,” Steve Chow, analyst at Sunwah Kingsway Group Research.

Shares of Bonjour, a smaller rival of Sa Sa, rose 3.1 per cent to their highest level since January 31. China’s largest footwear retailer Belle International rose 1.7 per cent.

Steven Leung, sales director at UOB Kay Hian in Hong Kong, said investors were waiting for indications of Beijing’s policy direction and for signs of recovery in upcoming earning reports.

“People are still concerned about whether the recent consolidation by the market has run its course or not,” Leung said, adding that Chinese banks and insurers could outperform as they had underperformed other sectors.

The Hang Seng Financial Index has fallen 2.8 per cent so far in February, compared to a 2.2 per cent loss in the benchmark Hang Seng Index.

Mainland markets in Shanghai and Shenzhen softened for a third straight day, but the decline was milder than Wednesday’s, when the markets lost nearly 2 per cent. The CSI300 index was down 0.2 per cent at midday while the Shanghai Composite Index was down 0.05 per cent.

China’s real estate sector remained weak amid concerns over fresh policy curbs, but the falls were milder than in previous sessions after Standard & Poor’s revised the outlook on China’s residential property sector to stable from negative and said it didn’t expect Beijing to drastically tighten or loosen its controls over the industry this year.

In Hong Kong, China Resources Land lost 0.7 per cent, while China Overseas Land fell 1.4 per cent. China Vanke, China’s largest property developer by sales, rose 0.5 per cent in Shenzhen.

Macau gambling stocks fell for the second consecutive day after the city’s gambling revenue for February fell short of expectations.

Sands China fell 1.1 per cent, while Galaxy Entertainment Group dove 2.3 per cent. Melco Crown Entertainment plunged 5.7 per cent, its worst daily loss since July 2012.