Insurer AIA leads Hong Kong stocks to fresh 10-year high

Hong Kong stocks edged up on Tuesday to close at their highest level in nearly 10 years, boosted by a rally in insurer AIA. But mainland shares dropped as investors took a wait-and-see approach before China’s five-yearly party congress that starts on Wednesday.

The benchmark Hang Seng Index eked out a gain of 0.02 per cent, or 4.69 points, to 28,697.49, marking its highest close since December 2007. Trading turnover shrank to HK$83.9 billion from yesterday’s HK$103 billion and last week’s average daily turnover of HK$95 billion.

The Hang Seng China Enterprises Index, known as the H-share index, edged down 0.3 per cent to 11,568.31.

Pan-Asian life insurer AIA Group was the biggest contributor to gains in the Hang Seng Index on Tuesday, responsible for adding 23 points. It rose 1 per cent to HK$61.65. The company is expected to release results for the third quarter later this week, and brokers are predicting a 20 per cent to 23.3 per cent increase in the value of new business for the quarter.

China Merchant Bank gained 2.0 per cent to a record high of HK$30.5, the best performer among Chinese banks. Goldman Sachs said it expected a continued recovery for China Merchants in the third quarter.

In contrast, Industrial&Commercial Bank of China slipped 0.9 per cent to HK$6.35, China Construction Bank eased 0.1 per cent to HK$7.03 and Minsheng Bank was down 0.3 per cent to HK$7.54.

Apple-related stocks diverged after an overnight rally in the US technology giant. Cowell e Holding shot up 8.9 per cent to HK$3.81 and AAC Technology gained 2.6 per cent to HK$146.4. However Sunny Optical sank 3. per cent to HK$117.2 and Q Tech dropped 2.2 per cent HK$15.1.

Chinese online major Tencent pulled back after reaching an all-time high on Monday, easing down 0.2 per cent to HK$354.8.

Snacks and dairy product supplier Want Want China climbed 3.3 per cent to HK$6.18 after Daiwa Capital raised its target price for the stock, citing recent signs of a recovery in China’s dairy product consumption.

Copper miner Jiangxi Copper jumped 2.3 per cent to HK$13.26, after issuing a positive earnings alert saying its net profit may have increased as much as 70 per cent year on year for the first nine months, thanks to rising prices of metal products.

Hong Kong Exchanges and Clearing retreated 1.6 cent to HK$222.0 following a 2.7 per cent jump the previous day, after the head of the exchange operator, Charles Li Xiaojia, said he was not aware of any specific plan or decision to review or reduce the stamp duty on stock transactions.

Mainland markets were generally lower for a second day. The Shanghai Composite Index eased 0.2 per cent to 3,372.04, the CSI300, that tracks large companies, fell by 0.4 per cent to 3,913.07 and the ChiNext start-up board dropped 0.3 per cent to 1,876.99. Meanwhile, the Shenzhen Composite Index edged up 0.1 per cent to 2,00.8.06.