Hong Kong shares rose slightly on Monday after last week's slump, buoyed by gains in property developers and Chinese internet giant Tencent, although worries about the US fiscal cliff kept trading activity muted. The Hang Seng index rose 0.2 percent to close at 21,430.3 points, while the China Enterprises index fell 0.1 percent largely on the back of weakness in cement stocks.
In China, the CSI300 of the top Shanghai and Shenzhen listings and the Shanghai Composite both fell 0.5 percent. Data released on Monday showed new loans at Chinese banks in October came in well below expectations, putting pressure on shares of the big banks, although total social financing - a broader gauge of monetary conditions in the economy - rose.
Other data released in the last few days showed Chinese exports, industrial output and retail sales all beat expectations, further evidence that China's economy is recovering. Hong Kong stocks shed more than 3 percent last week despite economic data from China which pointed to a recovery as investors locked in profits after a rally that had lifted the Hang Seng to a 15-month high earlier this month.
"With the US presidential election now out of the way, the market is now keeping an eye on how the US Congress is going to handle the threat of a looming 'fiscal cliff'," said Angus To, an analyst at ICBC International in Hong Kong. Turnover in Hong Kong came in a fifth below the average seen over the past month suggesting that investors stayed largely on the sidelines.
Adding to caution among investors, China's ruling Communist Party is in the midst of its once-in-a-decade leadership transition where leaders have stressed the need for financial and economic reform. Chinese markets rallied in the run-up to the Party Congress but have remained weak since it began last week. Developers were the best performing sector in Hong Kong with a sub-index of property shares up 0.8 percent. Local bellwether Cheung Kong Holdings was up 1.3 percent.
Chinese internet giant Tencent Holdings rose 1.7 percent and was the top boost to the Hang Seng ahead of its quarterly results, with analysts expecting a strong showing as school holidays in China drove users online. Those gains helped offset weakness in index heavyweight HSBC Holdings, which fell 0.2 percent as remained on the backfoot following a report that the bank was at the centre of an investigation by British tax authorities.
HSBC shares, which gained nearly 14 percent in the prior two months, are down 3 percent this month. In China markets, bank shares shrugged off the weak loan data and pared earlier losses to give the mainland stock indices a late boost. ICBC rose 0.5 percent while China Citic Bank rose 2 percent. China Railway rose 3.9 percent building on recent gains on hopes of more infrastructure spending.
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