Hong Kong, China shares close up for first time in 3 days, retailers rise

Hong Kong and China shares closed up on Wednesday, with retailers gaining ground after strong data from cosmetics firm Sa Sa Internationaand Italian fashion house Prada.

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

The Hang Seng Index closed up 0.7 per cent at 23,307.41. The China Enterprises Index of the top Chinese listings in Hong Kong rose 1.4 per cent.

Brokers said a firm finish in Chinese markets also lifted sentiment. The Shanghai Composite Index ended up 0.6 per cent at 2,397.17. The CSI300 of the top Shanghai and Shenzhen A-share listings gained 0.6 per cent.

“Investors are now not so worried that the continuous weakness of A shares will drag down the Hang Seng Index,” said Jackson Wong, vice president for equity sales at Tanrich Securities in Hong Kong.

Wong said the market had become news-driven with investors waiting for indications of Beijing’s policy direction and for signs of recovery in upcoming earnings reports.

In Hong Kong, retailers rose as consumer sentiment in China improved. Sa Sa International rose 7.9 per cent to a new high, while smaller rival Bonjour rose 5.2 per cent. China’s largest footwear retailer Belle International climbed 2.1 per cent.

Shares of Milan-based Prada rose nearly 6 per cent to a new high after the maker of luxury bags and Miu Miu dresses posted a 29 per cent rise in its preliminary revenue for the 12 months ended in January, driven by sales in Europe and the Asia Pacific. The stock closed up 3.3 per cent.

“The easing of tail risks in Europe and China leads us to be more positive on equities than we have been for some time, but there will be bumps in the road as stock markets react to the latest policy initiatives and developments,” fund firm Threadneedle Investments wrote in a Chinese New Year outlook report.

A decline in China’s real estate sector was milder than in previous sessions after Standard & Poor’s said it did not expect Beijing to drastically tighten or loosen its controls over the industry this year.

In Hong Kong, China Resources Land lost 0.2 per cent, while China Overseas Land fell 1.1 per cent. China Vanke, China’s largest property developer by sales, rose 2.1 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 0.7 per cent, while Galaxy Entertainment Group was down 0.9 per cent. Melco Crown Entertainment plunged 4.6 per cent.