Hong Kong stocks rally

Hong Kong stocks surged 1.4 percent to a three-month closing high on Wednesday as a strong rebound in Shanghai fuelled institutional buying of PetroChina and other big, liquid Chinese counters.
The Shanghai Composite Index rallied more than 4 percent on the belief that the market had found a floor after a six-month slide, encouraging buying of Hong Kong-listed Chinese shares across the board.
"Some people believed Shanghai was oversold and therefore due for a rally, and there may be some speculation on the government taking some measures or trying to help the market," said Howard Gorges, a director at South China Brokerage."There may be a feeling that the government may not want the market to go down further," he said.
Hong Kong's benchmark Hang Seng Index gained 350.09 points, despite an overnight slide on Wall Street, to close at 25,289.24, with most-traded China Life rising nearly 3 percent.
PetroChina rose 4.8 percent and Sinopec gained 3.8 percent in their third consecutive day of gains after Beijing moved to provide subsidies to compensate for refining losses. "The Hang Seng could test the 26,000 level in the near term on rotational buying," said Andrew To, sales director at Tai Fook Securities. The China Enterprises Index of Hong Kong-listed mainland companies, or H shares, jumped 3.11 percent to end at 13,838.22.
Mainboard turnover increased to HK$105.3 billion ($13.51 billion) from HK$87.74 billion on Tuesday. Brokers said some fund managers who held big cash positions in the first quarter on anticipation of bad US data were seen increasing their buying activity."Turnover today is up quite a lot. That indicated that there is institutional money coming in," said Gorges.
Shipping conglomerate China COSCO jumped more than 10 percent to an intraday high of HK$23 on Wednesday after it reported a forecast-beating 135 percent rise in 2007 earnings. The stock pared gains but closed nearly 8 percent above its Tuesday level.
Macau hotel and casino operator Galaxy jumped 13 percent after the Macau government said on Tuesday it would halt the issuance of new casino licences and freeze land allocations for new casinos to rein in the booming gaming industry.
Rival A-Max soared nearly 18 percent and Melco was up 5.5 percent. The power sector was boosted by hopes that Beijing would offer favourable policies or allow firms to hike tariffs to counter high coal prices. Datang Power jumped 14 percent and Huaneng Power, China's largest independent electricity provider, rose 10.5 percent even after it posted a worse-than-expected 80 percent fall in quarterly earnings.