Hong Kong and China stocks rise

Shares in Hong Kong and China rose on Monday, with the financial sector outperforming, buoyed by news of stock index futures being approved among other reforms and strong Chinese trade data. But in China, the benchmark index was sharply off its intraday high amid lingering worries over monetary tightening, more share supply and a clampdown on asset prices.
The Shanghai Composite Index ended up 0.52 percent at 3,212.75 points, well off an intraday high of 3,306.750 points in early trade. Gaining Shanghai A shares outnumbered losers 482 to 404, while turnover rose to more than a one-month high of 177 billion yuan ($25.93 billion) from Friday's 121 billion yuan.
After the market closed on Friday, the government announced that it had granted approval in principle for the country's first index futures and margin trading - key reforms that will give the market badly needed hedging tools. Last week, the market fell by 2.5 percent amid worries over the central bank's move to tighten liquidity and the China Securities Regulatory Commission's move to add share supplies to clamp down on excessive asset prices.
"Sentiment is still cautious overall and the index will find it hard to rise beyond the previous high of 3,361 points in the short term," Li Wenhui, senior analyst at Huatai Securities in Nanjing, referring to the level reached on November 24. Analysts said investors took the news of the much-awaited reforms in stride but some stocks such as brokerages, which would be the primary beneficiaries of the reforms, outperformed.
Top brokerage CITIC Securities, which jumped by its 10 percent daily limit at the opening, finished up 3.6 percent at 33.42 yuan. Smaller rival Haitong Securities added 1.06 percent to 19.13 yuan. The two were the most actively traded stocks. Large banks, which are heavyweights in the index, also outperformed as institutional investors bought their shares to have a bigger say in the derivatives when index futures are launched - expected in about three months.
Top lender Industrial and Commercial Bank of China added 1.34 percent to 5.30 yuan. The market was also buoyed by news on Sunday that growth in China's exports and imports last month blew past expectations, providing fresh evidence of the vigour of the economy.
"Investors took this brokerage news as a chance to lock in profit as it is long-delayed and widely expected. New share supply and property policy concerns capped the index's gain," said Chen Shaodan, senior analyst at Stockfly Securities in Beijing. Property companies continued their downtrend of recent weeks weighed by fresh signs of the government's clampdown on asset prices. China Vanke fell 1.64 percent to 10.18 yuan.
China vowed on Sunday not to let foreign speculative investment affect the property market, the latest expression of official concern that real-estate prices are racing ahead too fast. The benchmark Hang Seng Index ended up 0.51 percent, or 114.77 points, at 22,411.52. The China Enterprises Index of top locally listed mainland Chinese stocks rose 0.64 percent to 13,119.03.
"There will be a chance for more upside this week," said Castor Pang, research director at Cinda International. "In the short term, most investors seem more optimistic about the A-share market and that will help the Hang Seng Index." Market turnover rose to HK$74.18 billion ($9.57 billion) from Friday's HK$71.9 billion. Brokerages also soared and were among the top percentage gainers in Hong Kong.
Shenyin Wanguo jumped 8.14 percent to HK$4.65, easing from a five-month high of HK$4.88 set in the morning. Tanrich Financial Holdings rose 14.98 percent to HK$0.238. First Shanghai Investments gained 17.61 percent to a 19-month high of HK$1.67. But Cinda's Pang said the gains were unsustainable. "Most Hong Kong brokerages can't benefit from the policy, since they are involved only in Hong Kong business," he said.
"Investors are only using this as an excuse to push prices up." China COSCO Holdings rose as much as 7.8 percent, its biggest single day gain in five months, before stabilising up 6.78 percent at HK$11.02, as a strong rebound in China's exports fuelled hopes for a recovery of global trade and a better regional economic outlook. Its port operating arm COSCO Pacific gained 6.85 percent after surging 9.4 percent to a day high of HK$12.78.
"Economic indicators have improved and China's December exports and imports figures were better than expected because of a low base," said Andrew To, sales director at Tai Fook Securities. "But the recent rally is too sharp and a bit speculative," he said, noting that COSCO Pacific had risen nearly 30 percent in the past week.
Aluminium Corp of China Ltd (Chalco), the country's top aluminium company and the world's third-largest alumina producer, rose as much as 7.15 percent to its highest in more than 18 months at HK$10.66 after the company raised its alumina spot price by 7.1 percent to 3,000 yuan ($439) per tonne from January 8.