Stocks in Hong Kong and China chalked up a third consecutive session of bargain-hunting gains on Wednesday after positive US home sales data restored confidence in a global economic recovery and lifted stocks on Wall Street. The Hang Seng Index rose 0.8 percent, or 176.42 points to 22,289.57.
The China Enterprises Index of top locally listed mainland Chinese stocks gained 0.85 percent to 13,341.17. Sentiment in overseas stock markets also received a lift as concerns receded about the impact of Dubai's debt troubles following news that Dubai World planned to restructure about $26 billion in debt. Hong Kong's benchmark index has now regained all losses from last Friday's steep sell-off amid concern over a possible debt default by Dubai World.
But stocks erased some of their earlier gains in morning trade, as investors took profit, traders said. Turnover increased to HK$77.9 billion ($10.05 billion) from Tuesday's HK$74.9 billion. Geely Auto rose 9.3 percent during morning trading to an all-time high, boosted by a report that its parent was a step closer to completing its acquisition of Ford Motor's Volvo unit. Geely ended the day at HK$4.11, up 5.93 percent.
Macau casino operators rose on reports gambling revenue had risen 59 percent from a year earlier, signalling sustained growth in the world's largest gambling market. Recent debutant Sands China, the Macau unit of Las Vegas Sands, was up 6.71 percent at HK$10.18, while Wynn Macau, a unit of Wynn Resorts gained 6.23 percent to HK$10.40. Gold counters soared after gold futures rose to a record high on Wednesday as weakness in the US dollar spurred buying of the precious metal as a safehaven investment.
Realgold Mining rose 1.62 percent to HK$15.06, Sino Gold Mining gained 8.11 percent to HK$60, and Zijin Mining advanced 3.35 percent to HK$8.94. China's key stock index rose 1.06 percent, with metals shares strong, as confidence mounted that China would keep its economic policy mostly steady in the year ahead while talk of possible government support for banks lifted their shares.
The Shanghai Composite Index ended at 3,269.751 points, up for a third consecutive session after a sell-off last week shook out nervous investors worried by official warnings over asset price bubbles. Gaining Shanghai A shares outnumbered losers by 687 to 189 while turnover picked up to 203 billion yuan ($29.74 billion) from Tuesday's 190 billion yuan.
Metals shares were strong, with Shandong Gold up 8.17 percent at 91.88 yuan, while Zhongjin Gold climbed by its 10 percent daily limit to 66.67 yuan after US gold futures hit a record high. The banking sector rose on market talk that Central Huijin, an arm of China's sovereign wealth fund, may reinject dividends it receives from the four biggest state-owned banks this year, helping to ease pressure to raise funds, which had recently weighed on share prices.
The country's biggest lender, Industrial and Commercial Bank of China, advanced 1.33 percent to 5.33 yuan. Shenyin and Wanguo Securities said in a research note that it forecast the benchmark index's core range for next year at 2,900 to 4,200 points, backed by improving earnings at listed companies and expectations for yuan appreciation. It holds a positive view towards the property, pharmaceutical and coal sectors.
ChiNext, China's Nasdaq-style second board for start-up shares, marked its first month since the launch of trade with Huayi Brothers Media Corp, a film company, up its 10 percent daily limit at 64.12 yuan. Domestic media reported that one of its shareholders and stars, Li Bingbing, had won a high-profile award in Taiwan, while the official China Securities Journal reported that a film produced in co-operation with overseas studios was expected to hit theatres in February and would also be shown abroad.
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