Hong Kong’s Hang Seng Index closed at a 10-month high as bulls ended up in control despite early weakness. Meanwhile, China’s Shanghai Composite Index dropped for a second consecutive day. Hong Kong markets are “still quite positive and people are expecting the upwards side of the index”, said Gordon Tsui, managing director of investment holding company Hantec Pacific. But, with trading at such a high level, the Hang Seng is at a critical point as investors may be worried about markets adjusting. The Hang Seng benchmark ended up 0.27 per cent at 30,157.49, its highest level since June 15, after closing above the 30,000 mark on Monday. Before falling below that mark in June, it had tested the bottom resistance level for about 5 months. In the mainland, the Shanghai Composite closed down 0.16 per cent at 3,239.68 in a second day of losses. It was a quite a contrast from last week’s 5 per cent gain. The CSI 300 of large caps remained up the entire day to end with a 0.45 per cent gain to 4,075.43. Mainland property was on investors’ minds, said Tsui. Gree Electric shoots up to daily limit as state parent seeks to sell US$6.2 billion stake in ownership shake-up On Monday, the Chinese government announced a plan to relax residency curbs in many smaller cities and increase infrastructure spending, in an attempt to revive a slowing economy. They aim to increase those who live in urban areas by 1 percentage point by the end of the year, from 59.6 per cent in 2018. Country Garden Holdings rose 5.73 per cent to HK$13.28, Longfor Group Holdings was up 1.19 per cent to HK$29.70 – its highest ever level – and China Aoyuan gained 3.56 per cent to HK$9.89. In the mainland, top developer China Vanke advanced 6.15 per cent to 33.48 yuan. Meanwhile Hebei-based China Fortune Land Development jumped 8.73 per cent to 34.14 yuan – it was the second largest gainer on the CSI 300 – after it also won shareholder approval for a sale of five-year offshore bonds worth US$1 billion. Meanwhile, Geely Automobile Holdings reached its highest level since November, ending up 0.93 per cent to HK$17.32, after Bank of America Merrill Lynch raised it to a “buy” rating citing new models and improvement in China’s manufacturing outlook. Citi raised its price target on the car maker’s new business of supplying auto parts, particularly to Malaysian car brand Proton, which it signed a joint venture with last year. Can the world’s investors trust China’s wild stock markets? After markets closed on Monday, Geely announced total sales volume for March increased 3 per cent when compared to the same period last year, and an almost 50 per cent increase from February, according to a stock exchange filing. Sales in China, however, were down 2 per cent, and sales for the first quarter of the year lost 5 per cent. China’s March retail passenger car sales fell 12 per cent to 1.78 million vehicles, according to the Passenger Car Association, in its 10th consecutive month of declines. The figures were announced after trading closed, and all major car makers ended in positive territory. Energy-related stocks were another talk of the day. The China Coal Industry Association said Chinese coal companies plan to increase production by more than 100 million tons this year, reported local media. Vice-president of the association, Wang Hongqiao, said China faces an oversupply in 2019 and all major coal companies slumped on the news. The country’s largest coal mining state owned enterprise, China Shenhua Energy, dropped 1.51 per cent to 20.22 yuan. Baoshan Iron & Steel Co lost 1.75 per cent to 7.84 yuan and Shaanxi Coal Industry fell 1.62 per cent to 9.69 yuan. Meanwhile, the vice-chairman of the China Electricity Council, Yu Chongde, said the country’s electricity demand may increase by 5.5 per cent this year. Factors like high coal prices have led to more than 60 per cent of coal-fired power generation companies to suffer losses, local media reported. Key electric power industry players were little moved and mixed on the news by close. GD Power Development and China Huadian Power International rose, by 0.36 per cent to 2.76 yuan and 0.66 per cent to 4.58 yuan, respectively. Datang International Power Generation, however, dropped 0.28 per cent to 3.53 yuan, having climbed 5 per cent since March 28, and China Huaneng Power International fell 0.61 per cent to 6.57 yuan.