Hong Kong stocks hit a record high on Tuesday, but blue chips swung to a flat close, while China plays held on to a 0.3 percent gain as China Construction Bank advanced, boosted by the prospects of a Shanghai listing.
China COSCO Holdings Co Ltd rallied as much as 18 percent to a record high after saying it would buy its parent's dry bulk shipping assets for US $4.6 billion in a move that analysts said would significantly boost the company's earnings. The market meandered in the first trading hour in the absence of any direction from Wall Street, which had been closed for a long holiday weekend.
But buying gathered pace, and the market managed to set a new peak, its second in the last three sessions, as investors brushed off reports that China's programme allowing mainlanders to invest directly in Hong Kong stocks was hitting snags.
"We've already discounted the news," said Ben Kwong, chief operating officer at KGI Asia. "But the uncertainty will keep the index at around the current level." But a weak close in the afternoon by Japanese stocks made investors uneasy, and as the session drew to a close, the benchmark Hang Seng Index had veered into negative territory, ending the day 18.02 points lower.
The index finished at 23,886.07, versus a new intraday peak of 24,127.16. The China Enterprises index of H shares, or Hong Kong-listed shares in mainland companies, gained 41.78 points to 14,338.88, having struck a new peak at 14,574,73. Mainboard turnover was HK$92 billion (US $11.8 billion), slightly above Monday's HK$84.4 billion.
China Construction Bank, the day's most active stock, climbed 2.2 percent to HK$6.65, having earlier set a new high. China's securities regulator said it would review on Friday a plan by the lender to list domestically. Bank of Communications, the country's No 5 lender, gained 0.7 percent to HK$8.87 on news it had applied to launch a scheme in Beijing to let individual clients invest directly in Hong Kong securities.
China COSCO jumped a further 2.8 percent to HK$19.56, following a five-session rising streak that anticipated the asset injection from its parent. Mainland real estate developer Country Garden fell 1.5 percent to HK$12.8 following a three-session gaining streak that started two days before its inclusion in the MSCI index series.