Hong Kong stocks struck fresh peaks on Thursday, with China plays gaining 0.2 percent as fresh year-end fund inflows prompted investors to pile into underplayed sectors such as property and oil.
Investors bid up mainland real estate plays like Agile Property, while Hong Kong developer Cheung Kong got a boost from Wednesday's media report that sister company Hutchison Whampoa was in talks with France Telecom's Orange to sell its European 3G mobile phone business.
But Hutchison fell 0.7 percent to HK$73.90 in heavy trade following Wednesday's sharp gains. The benchmark Hang Seng index ended flat, nudging up 14.53 points to close at 19,265.32, its second-straight record closing high. It earlier set an all-time high at 19,404.01.
The China Enterprises index of mainland H shares, or Hong Kong-listed shares in mainland companies, set a fresh peak at 8,795.98 before investors cashed in mainland lenders, after their recent sharp gains. H shares ended at their third-straight record closing high of 8,622.88.
Turnover was high at HK$53.7 billion (US $6.9 billion), inching up from Wednesday's HK$53.5 billion. "We're seeing rotational buying and still fresh funds are coming in," said Miles Remington, sales director at BNP Paribas. "But trying to find rationalisation or rationale behind some of these moves is quite difficult."
Cheung Kong, which owns a more than 50-percent stake in Hutchison, jumped 2.8 percent to HK$95.25 in heavy trade. Sun Hung Kai Properties gained nearly 1 percent to HK$91.55. The Hang Seng property sub-index advanced 1.5 percent to 22,542.10, a level not seen since October 1997.
Investors also bid up mainland property stocks while selling off banking shares. Agile Property Holdings soared 5.8 percent to HK$7.62, having earlier set a new high, while China Overseas Land and Investment Ltd gained 1.6 percent to HK$8.06.
China Construction Bank slid 1.8 percent to HK$4.29 while Bank of Communications sank 1.4 percent to HK$7.26. Oil stocks moved up as investors said they saw the end of the correction for commodities.
PetroChina Co Ltd, the H-share leader, gained 1.8 percent to HK$9.56, off an intra-day record. CNOOC Ltd climbed 1.3 percent to HK$6.86. China Everbright Ltd surged 5.6 percent to HK$8.34 after BBVA agreed to buy stakes in its competitor, CITIC International Financial Holdings.
Spain's second-largest bank became the first Spanish bank to buy into booming China after agreeing to pay 989 million euros ($1.3 billion) for stakes in China's seventh-biggest lender CITIC Bank and its international arm. Foxconn International Holdings Ltd tanked 5.3 percent to HK$23.95 after Merrill Lynch downgraded the stock to "neutral" from "buy", citing inventory build-up and rising competition.