Hong Kong stocks are set to open higher on Wednesday as investors cheer China's latest plan to inject more than 2 trillion yuan in energy-saving projects and welcome a fall in Spain's short-term borrowing costs -- signs of growing confidence in the troubled southern European economy.
China's cabinet said after the market close on Tuesday that it aims to invest as much as 2.37 trilion yuan to develop key projects aimed at cutting carbon emissions during the 12th five-year period which ends in 2015, according to a statement posted on the State Council's website. The market has been expecting China to announce further stimulus measures after economic growth in the world's second largest economy slowed to a three-year low.
Earnings results will remain in focus. State-owned China Telecom Corporation Ltd. (0728.HK ), leading sportsware maker Li Ning Company Ltd (02331.HK ), and jewellery retailer Luk Fook Holdings (International) Ltd (0590.HK ) are among a batch of companies due to report first-half results later in the day.
The benchmark Hang Seng Index closed down 0.02 per cent at 20,100.09 on Tuesday, while the Hang Seng China Enterprises Index, which tracks the performance of Hong Kong-listed China enterprises, rose 0.32 per cent to close at 9,825.95.
European stocks ended higher overnight, after Spain paid sharply lower interest rates to raise 4.5 billion euro (US$5.54 billion) in a bond auction on Tuesday amid growing speculation that the crisis-stricken economy will agree to a bailout. In recent months, Spain's 10-year borrowing cost has pushed through 7 per cent, the level which triggered earlier bailout requests from Ireland, Greece and Portugal. Investors also believe the European Central Bank is moving closer to tackling the euro zone crisis. The benchmark FTSE 100 index gained 0.57 per cent to close at 5,857.52.
In the US, the S&P 500 Index closed down 0.51 per cent to 13203.58 as investors rushed to lock in profits after the gauge hit a four-year high during the day.
Factors to watch:
-- Shipmaker China Rongsheng Heavy Industries Group Holdings Ltd. (1101.HK ) said after the market close on Tuesday that interim profit slumped by 82.3 percent to 215.8 million yuan from a year earlier as weak global trading activities curbed demand for new ships.
-- Mainland developer Yuexiu Property Co. Ltd. (0123.HK ) also said after the close on Tuesday that first-half net profit shrank to 1.58 billion yuan from 4.5 billion yuan a year earlier.
-- Haier Electronics Group Co., Ltd. (1169.HK ), China's largest listed home appliance producer, said on Tuesday that first-half profit increased to 712.4 million yuan from 588.5 million yuan.
-- Secretary-general of the China Rare Earth Industry Association Ma Rongzhang on Tuesday was quoted by the official Xinhua News Agency as saying that smuggling volume for rare earth was 1.2 times higher than for normal exports.
-- China Shenhua Energy Co. Ltd.(1088.HK ）said commercial coal output grew 9.1 percent from a year earlier last month, but coal sales fell by 1.6 percent over the same period to 31.6 million tonnes.