Hong Kong shares closed on Tuesday near a three-month high, lifted by a 28 percent surge for Esprit Holdings as investors cheered the appointment of an executive from rival Inditex as its new chief executive. But shares of Standard Chartered Plc plunged 14.9 percent amid trading volume that was about 47 times its 30-day average.
Shares were battered after New York's top bank regulator threatened to strip the British bank of its state license, labelling it a "rogue institution" that allegedly hid $250 billion in illegal transactions tied to Iran. In the end, the Hang Seng Index managed to edge up 0.4 percent to 20,072.6, its highest close since May 10. The index ended off the day's highs and held within a 150-point range, as it did on Monday.
--- Shanghai Composite Index moves higher Strong moves for both StanChart and Espirit helped lift overall turnover in Hong Kong, which on Tuesday neared the highest volume recorded in the last two months.
"Stronger volumes in the broader market and gains in the riskier sectors are signs that a short-term rally is in store," said Wang Ao-chao, UOB-Kay Hian's Shanghai-based head of equity research. Before the drop, StanChart had been up more than 10 percent so far this year. Tuesday's losses single-handedly dragged its Hong Kong listing 5.8 percent in the red for the year, hitting its lowest close since June 6.
By contrast, Esprit shares soared 28 percent to a nearly two-month high in heavy volume. Gains accelerated in the afternoon after the struggling retailer said at the midday trading break that it had appointed Jose Manuel Martínez Gutiérrez as its new chief executive, effective as of the end of September. Martínez was most recently group director of distribution and operations at Industria De Diseño Textil, SA (Inditex) based in Spain. Inditex is the owner of fashion brands including Zara and Massimo Dutti.
Tuesday's gains were Esprit's best single-day performance since January 21, 1998, when it spiked 46 percent. Mainland Chinese markets rose amid an increase in trading volume. The Shanghai Composite Index rose 0.1 percent to its highest level in more than two weeks, powered by gains in the resource sector after the country's Ministry of Industry and Information Technology (MIIT) imposed new minimum capacity requirements on rare-earth smelting companies.
The CSI300 Index of the top Shanghai and Shenzhen listings rose 0.1 percent. Shares of larger players jumped, seen benefitting from the move to consolidate the rare-earths sector. Inner Mongolia Baotou Steel Union rose 4.4 percent to the highest level since mid-June. China Life lost 1.9 percent in Shanghai and 1.2 percent in Hong Kong. Its biggest rival, Ping An Insurance, shed 1.5 percent in Shanghai and 0.5 percent in Hong Kong.
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