Hong Kong stocks rose 0.68 percent to a six-week closing high on Tuesday, with Sinopec Corp jumping after Asia's top refiner posted forecast-beating earnings and flagged an upbeat first quarter.
The H-share index of Chinese firms listed in Hong Kong rose 1.6 percent, boosted by a 13 percent gain in ZTE Corp after China's second-largest telecoms gear maker won an order to supply equipment for the country's first high-speed wireless network.
"Ample market liquidity ahead of some major Chinese IPOs helped boost the H shares and that propelled local stocks," said Andrew To, sales director at Tai Fook Securities. But he said it was not healthy for Chinese stocks to ignore a hike in China's bank reserve requirement last week.
The benchmark Hang Seng Index gained 138.16 points to end at 20,347.87, while H shares closed at 10,012.93, just off the session high of 10,053.13 in the first day of trade after a long holiday weekend. China's main stock index hit a record closing high on Tuesday, despite the central bank announcing late last week a 0.5 percentage point hike in the bank reserve requirement. Some dealers said the move was healthy.
"Though the cut may affect some Chinese firms, it was a healthy cut and the impact to the market was seen as mild," said Alfred Chan, chief dealer at Cheer Pearl Investment. "The central bank's move was a vote of confidence to the growth of China's economy," said Chan, adding that sentiment remained cautiously optimistic, with Chinese property and banking stocks leading the market. Turnover was a robust HK$55.50 billion (US $7.12 billion) compared with last Wednesday's HK$51.7 billion prior to the long holiday.
Sinopec jumped 3.5 percent to HK$7.14 after it flagged a strong 2007 first quarter, saying it expected January-March net profit to rise more than half. The company on Tuesday posted a better-than-expected 54 percent jump in fourth-quarter earnings.
Investors were seen snapping up Chinese mineral stocks with Hunan Non-ferrous Metals rising 7.6 percent, Jiangxi Copper gaining 7.4 percent and Chalco surging 5.2 percent. Anhui Conch jumped 9.3 percent to HK$32.45 after touching an all-time high of HK$33.10 on optimism about China's economy.
But Chinese port operator China Merchants dropped 6.41 percent to HK$35.05 after hitting a record HK$37.60 on news that it could invest in its parent's Vietnam port project. Other blue chips were generally higher, with HSBC up 1.2 percent at HK$138.70 and China Mobile rising 0.5 percent.