Hong Kong shares up; Shanghai down

Hong Kong shares climbed 0.22 percent on Wednesday as dealers extended the previous day's strong gains in quiet trade ahead of the year-end holidays. The benchmark Hang Seng Index added 51.33 points to close at 23,045.19. Turnover was 54.20 billion Hong Kong dollars (6.97 billion US).
"Shares have been following yesterday's rebound, but it seems investors are still pretty cautious as they started taking profit again when the index neared the 23,200-point level," Tanrich Securities investment manager Jackson Wong said. The index ended 1.57 percent higher Tuesday. Sinopec was one of the biggest blue chip gainers, rising 2.4 to 7.39 Hong Kong dollars after an unexpected fuel price hike in China.
"Given the prevailing concerns about inflation, the price hike at the pump may be taken by investors that China's inflation is under control... hence it further lowers the chances of a short-term interest rate hike," SHK Financial analyst Daniel So told Dow Jones Newswires. Developer Cheung Kong rose 3.5 percent to 120.40. The gain came on a day when the Hong Kong Economic Times reported the firm was planning to launch the city's first yuan-denominated initial public offering.
Chinese shares closed down 0.90 percent as banks tumbled on a state media report that the government may introduce tighter lending controls, dealers said. The Shanghai Composite Index, which covers both A and B shares, was down 26.21 points to 2,877.90 on turnover of 126.1 billion yuan (19.0 billion dollars).
Banks led the market fall after the China Securities Journal said the central bank was considering new methods to restrict lending after previous efforts to stem the flood of liquidity into the economy proved insufficient. "Besides more limits on the loans the banks can extend, (the report) also hints that banks may have to set aside greater provisions for their existing loans," Southwest Securities analyst Zhang Gang said.
Bank of China fell 0.6 percent to 3.25 yuan and Industrial and Commercial Bank of China declined 0.7 percent to 4.18. Property developer China Vanke lost 1.4 percent to 9.00 yuan after rising 10 percent Tuesday and Gemdale slid 1.1 percent to 6.27 after rising 8.6 percent.