Shares in Hong Kong and Shanghai bounced on Friday as solid earnings from top Chinese lenders pushed banks up, while China's remark about sticking to its loose monetary policy lifted overall sentiment. The ChiNext market, China's long-awaited Nasdaq-style second board, debuted on Friday with a speculative surge that more than doubled the price of all of its 28 stocks from their IPO prices in intraday trade.
A good sign for companies lining up to list on China's main stock markets. Central bank governor Zhou Xiaochuan said on Friday that China would stick to an appropriately loose monetary policy, reaffirming Beijing's commitment to easier rates as speculation mounts about an eventual policy shift. China's key stock index rose 1.2 percent on Friday and posted a 7.8 percent gain for October, boosted by solid earnings and an upbeat economic outlook.
-- Hong Kong shares record biggest one-day gain in six weeks. The benchmark Hang Seng Index rose 2.29 percent, its biggest one-day gain in six weeks, or 487.88 points to 21,752,87. Turnover was HK$76.35 billion ($9.9 billion), down from Thursday's HK$80.81 billion, the highest since September 17. For the week, the index was down 3.7 percent, its biggest weekly drop sine June, but for the month the index was up 3.8 percent, its second monthly gain.
Friday's rally may be short-lived as caution would likely rule the market next week, with investors eyeing the Federal Reserve's Open Market Committee meeting, analysts said. "After a sharp rebound today, there are no more bargain-hunting opportunities, so the market will just be stable next week," said Marco Mak, research head at Taifook Securities.
Industrial & Commercial Bank of China (ICBC) advanced 3.45 percent, while Bank of China gained 5.77 percent, after both reported a jump in quarterly profit. In Shanghai, ICBC gained 2.22 percent to 5.06 yuan, while Bank of China rose 2.27 percent to 4.06 yuan. Merchants Bank jumped 4.16 percent to 17.77 yuan ahead of its earnings report. Henderson Land led Hong Kong developers higher, gaining 7.51 percent.
The company said it planned to pay a HK$9.6 billion ($1.24 billion) land premium, in a bid to boost its residential land reserve. Other local developers, which have fallen in recent sessions on concerns Hong Kong may impose more measures to curb fast rising property prices, also rebounded. Sun Hung Kai Property was up 6.40 percent. The China Enterprise Index of top locally listed mainland Chinese stocks rose 2.43 percent to 12,769.36.
Brilliance China Automotive rose 12.4 percent, after a strong 8.53 percent open. The Chinese minibus manufacturer and a joint venture partner of BMW said it would sell its loss making-Zhonghua sedan brand business. China Resources Enterprise Holdings soared 8.62 percent as it focused on the rapidly growing mainland consumer market.
CNOOC Ltd was up 4.52 percent. China's top offshore oil and gas producer said it produced 18.4 percent more oil and gas in the third quarter. Tsingtao Brewery was up 3.57 percent. China's best known beer brand said that its net profit jumped 93 percent in the third quarter.
After opening firm at HK$2.18, Comtec Solar, the China-based solar ingots and wafer maker, fizzled out on its debut. The stock ended HK$1.98, versus its IPO price of HK$2.10. The Shanghai Composite Index ended at 2,995.848 points, after falling to its lowest close in more than two weeks on Thursday. Gaining Shanghai A shares outnumbered losers by 727 to 151, while turnover was 117 billion yuan, unchanged from Thursday.
The main index and ChiNext retreated from the day's highs. Investors will be keeping an eye on Chinext next week since it would likely impact on the main board, analysts said. Steel shares were higher, with China's Baoshan Iron and Steel, the world's third-largest steelmaker, advancing 1.33 percent to 6.84 yuan. The company posted a 6.7 percent rise in quarterly net profit.
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