Hong Kong stocks ended up 0.35 percent on Thursday, defying analysts' expectations of a continued retracement, as investors scooped up recent decliners such as New World Development Co Ltd.
But the fundraising pipeline, led by Bank of China's US $9.8 billion Hong Kong initial public offering, which kicked off its international roadshow earlier in the day, kept investors on edge. The benchmark Hang Seng index closed at 17,140.78. It fell to as low as 17,010.40 in the morning before investors piled in, driving the market near the 17,200 level.
"After the market fell to 17,000, there was strong buying interest," said Kenny Tang, associate director at Tung Tai Securities. "Liquidity is still strong, so the market buys on dips." The China Enterprises index of H-shares rose 0.10 percent to 7,368.71. Turnover was heavy HK$44.8 billion (US $5.7 billion), up 13 percent from Wednesday's HK$39.7 billion. Though the market's strength caught many by surprise, some say buying interest may wane due to the fundraising pipeline.
After Sun Hung Kai Properties sold US $1 billion in shares on Wednesday, the market is gearing up for the Bank of China IPO. Many property shares recovered after their recent sell-off. Henderson Land Co Ltd rose 1 percent to HK$45.10 and New World Development climbed 2.1 percent to HK$14.65.
Chinese petrochemical firms rose following news that China may raise retail fuel prices in coming weeks, for the second time since March, to help refiners offset $70-a-barrel crude costs, industry officials said on Wednesday.
Sinopec Yizheng Chemical Fibre Co Ltd rose 3.7 percent to HK$2.125 and Sinopec Shanghai Petrochemical Co Ltd gained 2.2 percent to HK$4.60.
Lingbao Gold surged 7.1 percent to HK$9.80, and earlier set a record high after CLSA issued a bullish report on the miner. CLSA said Lingbao is poised to boost earnings growth as it increases gold production from its own mining operations.
Hong Kong Exchanges and Clearing Ltd rallied 7.6 percent to its highest-ever close of HK$63.40 after reporting a near-doubling of its first-quarter earnings on Wednesday and as investors bet that Asia's largest listed exchange could soon be a Hang Seng index constituent. The manager of the Hang Seng index is expected to announce the results of its quarterly review of the blue chip gauge on Friday. Johnson Electric Holdings Ltd fell 4 percent to HK$6.05 on speculation that the micro-motors maker would be removed from the Hang Seng index.
Among those added to the MSCI standard index series announced on Thursday, mobile handset maker Foxconn International Holdings extended its recent gains and jumped 4.6 percent to HK$19.55, having earlier tapped record peaks.