Hong Kong stocks gained 0.83 percent on Tuesday as shares in PetroChina Co Ltd and other oil companies climbed on strong crude prices, helping to recoup some of the previous session's losses following China's move to raise interest rates.
The blue chip Hang Seng index gained 141.87 points to finish at 17,149.75 on turnover of HK$21.8 billion (US $2.8 billion) down from Monday's HK$28.0 billion. The China Enterprises index of mainland H shares rose 1.6 percent to 7,011.11, boosted by oil and life insurance stocks.
"Yesterday's correction was a bit overdone," said Howard Gorges, vice chairman at South China Brokerage. "We're more susceptible to interest rate increases because that's what we've been brought up on, but in China, they're not as sensitive," Gorges said, referring to the positive close of the benchmark Shanghai stock index on Monday. But some investors were still wary of China's move on Monday to raise interest rates for the second time in four months.
"I don't have faith in equities at this level. Global central banks are raising rates one by one and that's going to take away liquidity," said Dale Tsang, managing director at Polaris Capital. PetroChina, the country's top oil producer, was the biggest boost to H shares, vaulting 3.2 percent to HK$9.02 as crude prices kept firm above $72 after Iran, the world's fourth-largest oil exporter, vowed to pursue its nuclear programme.
Rival CNOOC Ltd shot up 2.7 percent to HK$6.84. China Oilfield Services Ltd was the top gaining H share. The drilling services arm of CNOOC's parent rocketed 8.8 percent to HK$4.21 after reporting on Monday its first-half earnings rose 21 percent to 670 million yuan ($84.1 million). Merrill Lynch upgraded the stock to "buy."
Top mainland life insurer China Life Insurance Co recovered from Monday's losses to end at HK$14.06 for a 2.5 percent gain. Rival Ping An Insurance built on Monday's gains to rise 1.2 percent to HK$25.9. China Overseas Land and Investment Ltd, the country's largest property developer by market value, more than recovered its sharp losses on Monday. It leapt 6.4 percent to HK$5.3 after posting a 48 percent rise in first-half earnings on Monday amid hefty gains from property projects on the mainland.
PICC Property and Casualty Co Ltd, China's top non-life insurer, extended its slide from Monday, plunging 5.2 percent to HK$2.76 in heavy trade after posting first-half results that lagged forecast. Esprit Holdings Ltd fell 1.2 percent to HK$64.15 after the Europe-focused retailer rallied on the strong euro to six straight days of gains.