Hong Kong-listed China plays rose 1.2 percent on Tuesday as insurers rallied to all-time highs on an upbeat profit guidance, while Angang Steel led that sector to records amid outlooks for higher steel prices.
Blue chips gained 0.5 percent as investors chased Sun Hung Kai Properties and other underplayed local real estate plays, sending the Hang Seng property sub-index to near-decade highs.
Investors also bid up mainland property developers in a play for yuan-denominated assets on expectations the Chinese currency would strengthen further in the near-term following China's announcement on Friday it would raise interest rates. The benchmark Hang Seng Index closed up 107.32 points at a record close of 23,472.88, having earlier touched 23,534.38, its third-straight intraday high.
The China Enterprises index of H shares, or Hong Kong-listed shares in mainland companies, struck a new high at 13,513.93 before finishing up 160.30 points at 13,480.72.
Mainboard turnover was among the 10 highest ever at HK$96.6 billion (US $12.4 billion) compared to Monday's HK$84.6 billion. "If turnover can be maintained around the HK$90 billion level, then the upside momentum will still be there," said Patrick Shum, strategist at Karl-Thomson Securities. "It may be volatile in the next few days as investors who sold short the futures may try to pull the market down."
Angang Steel and Maanshan Iron & Steel Co Ltd rallied in heavy trade following broker reports that forecast stronger steel prices. Angang rallied as much as 23 percent before settling up 20.3 percent at HK$21.85. Maanshan jumped 10.6 percent to HK$7.02.
J.P. Morgan raised its earnings forecasts for both companies while Goldman Sachs added Angang to its Conviction Buy List and upped its 12-month share target price by 160 percent to HK$27. Ping An Insurance leapt 4 percent to HK$65.7 after saying late on Monday its first-half 2007 net profit may have more than doubled.
Rival China Life, the day's most traded shares, vaulted 3.3 percent to HK$32.45. The Hang Seng property sub-index rose 2.4 percent, closing in on an all-time high set in August 1997. Henderson Land raced up 5.4 percent to HK$57.85 and Sun Hung Kai properties notched a percent 4.2 gain to HK$104.70.
Among mainland properties, Country Garden bolted 4.6 percent to HK$8.71 and Shimao Property soared 7.8 percent to HK$22.10, earlier having set an all-time high. Fosun International Ltd, a mainland conglomerate which develops properties, shot up 4.6 percent to HK$12.32.
China Oilfield Services Ltd, the drilling services arm of top mainland offshore oil firm CNOOC group, powered up 12.6 percent to HK$11.98, earlier having touched all-time highs, following news that Transocean Inc, the world's largest offshore driller, would buy GlobalSantaFe Corp for nearly $18 billion. Also, Citigroup said in a research note released on Tuesday that China Oilfield may report stronger-than-expected first-half earnings amid higher-than-expected utilisation.