Hong Kong shares pared early sharp gains to close 3.2 percent higher on Wednesday after the initial euphoria over a Barack Obama win gave way to concerns over a looming recession in the world's largest economy. "I reckon investors will focus again on the economy. The US recession will not disappear overnight," said Louis Wong, research director at Phillip Securities.
Chinese financial stocks, including Construction Bank, gained for a third straight day, while energy stocks such as PetroChina climbed after oil prices rose. Stock markets around Asia cheered Wall Street's biggest ever Election Day gain, with Tokyo's Nikkei average up 4.5 percent and Shanghai's main index up 3.2 percent. "The US election is offering a kind of change that investors have been waiting for. It's a stimulus to investor confidence," said Winson Fong, managing director at SG Asset Management in Hong Kong.
Shares in PCCW soared 27 percent in their biggest one-day percentage gain in nine years as speculators chased up the stock. The shares resumed trading after tycoon Richard Li led a $2 billion buyout offer by major shareholders in the city's dominant fixed-line operator.
But market watchers expect minority investors will shoot down the HK$4.20 per share offer as it is below market expectations. The benchmark Hang Seng Index closed the session up 455.82 points at 14,840.16. The index rose as much as 6.5 percent earlier.
Mainboard turnover rose to HK$63.4 billion ($8.1 billion) from HK$45.3 billion on Tuesday. The China Enterprises Index of top locally listed mainland Chinese companies surged 5.3 percent to 7,225.69. Chinese financials notched up strong gains, drawing strength from the jump on the Shanghai Composite Index.
Top lender Industrial & Commercial Bank of China gained 3.7 percent, extending its rally into a third straight session on hopes of easier lending on the mainland. No 3 lender China Construction Bank rose 5.5 percent. BNP Paribas upgraded the sector to neutral from underweight on attractive valuations.
China Life gained 3.4 percent, while smaller rival Ping An Insurance put on 7.8 percent. Local lender BOC Hong Kong surged 17.2 percent to HK$9.70 after giving up more than 10 percent in the previous five sessions. A 10 percent jump in oil prices overnight sent energy stocks soaring. Asia's largest oil and gas producer, PetroChina, advanced 4.3 percent, while Sinopec Corp, Asia's largest refiner and China's second-biggest oil producer, moved up 5.3 percent.
China Shenhua Energy, the world's most valuable coal miner, gained 3.5 percent. Mainland property counters built on earlier gains on hopes that easing lending curbs would help demand for real estate. China Overseas Land Investment climbed 9.5 percent while China Resources Land added 8 percent.