Hong Kong blue chips gained 0.3 percent on Wednesday, as HSBC rose after a Dubai-based firm said it had taken a large stake in the bank, and utility stocks jumped as investors sought safe havens in the wake of China's latest tightening measures.
China stocks closed at their lowest in a month as lenders and insurers led a 0.4 percent decline in Hong Kong-listed mainland firms. Investors were worried that China would aim to further cool the country's credit growth after ordering its banks to hold more of their deposits in reserve on Sunday.
"People still expect China to take measures to curb stock market speculation," said Antony Mak, sales director at DBS Vickers. "But, we're becoming used to that. Wall Street is still making new highs and there's plenty of liquidity."
The benchmark Hang Seng Index ended the day up 69.51 points at 20,388.49. "People are parking their funds in utilities, which shows they're not abandoning Hong Kong yet," said Kent Yau, deputy research director at Core Pacific Yamaichi.
The China Enterprises index of H shares, or Hong Kong-listed shares in mainland companies, fell 41.91 points to end at 9,993.10, its lowest close since April 4. Turnover was HK$47.0 billion (US $6.0 billion) compared to Monday's HK$49.8 billion.
HSBC Holdings Plc climbed 0.8 percent to HK$145.40 after Dubai International Capital, owned by the ruler of Dubai, said on Tuesday it had bought a stake in HSBC for a fund it manages, making the fund one of the largest investors in the global bank.
Mainland financials were the biggest drag on the H shares, with China Life sliding 1.2 percent to HK$24.15. China Merchants Bank fell 2.5 percent to HK$18.78. Investors bid up low-risk utilities as they abandoned mainland financial plays, driving CLP Holdings 2 percent higher to HK$58.60. HK Electric ended up 3.7 percent at HK$40.70.
Other stocks with stable fundamentals also rose, as mainland toll-road operators gained. Zhejiang Expressway Co Ltd leapt 4.4 percent to HK$6.72 and Jiangsu Expressway shot up 3.4 percent to HK$6.92.
Europe-focused apparel retailer Esprit Holdings Ltd was the best blue chip performer, vaulting 4 percent to HK$99.30, earlier having tapped a new all-time high, thanks to a strong euro, which hit a record high against the yen on Tuesday.
Hong Kong Exchanges and Clearing shed 0.8 percent to HK$74.75 in heavy trade amid the recent underperformance in the local market. Hong Kong has been trailing Wall Street and Shanghai, which have hit consecutive record lately.