China shares closed higher on Wednesday, helped by property developers and steady gains among banking shares ahead of a slew of closely-watched earnings later this week. Hong Kong's Hang Sen Index finished weaker as earnings from large caps kept the benchmark on the defensive. The index finished down 0.14 percent at 22,825.4, while the China Enterprise Index dipped 0.24 percent.
The benchmark Shanghai Composite Index ended up 1.0 percent at 2,948.5 points, extending three-day rising streak. China's property sub-index closed up 2.7 percent as investors turned to cheap realty stocks, analysts said. Top listed developer Vane finished up 2.4 percent.
The sector was also supported by market talk that developers will get bank credit if they agree to participate in the central government's social housing push and that policy on housing prices will be pegged to GDP growth, analysts said. Large cap banks continue to record steady gains as some investors bet that strong earnings from the sector would help their shares resume the upward trend seen since the start of the year.
Bank of China Ltd , expected to report results on Thursday, gained 0.61 percent. Larger rival Industrial & Commercial Bank of China Ltd was up 0.9 percent, providing the biggest boost to the benchmark. Barclay Capital is tipping both banks as top performers. China Coal Energy Co Ltd led losers, recording its biggest one-day dip since the financial crisis of 2008. The company, whose 2010 earnings fell well short of market estimates due to rising costs, plunged 9.14 percent on the day.
Other energy stocks however, traded up, with China Resources Power Bldg Co Ltd up 3.6 percent and leading gainers on the day. "Company earnings are likely to dominate trading in the short-term, with shrinking volume in Hong Kong, China and even the US shows there's some caution out there" said a head trader at a Japanese bank in Hong Kong. According to Thomson Reuters Star mine, about half of the companies on the Hang Sen Index had reported annual results as of Tuesday's close with only 41 percent of those beating or meeting market expectations.
China Life Insurance Co Ltd also took a hit, dropping 2 percent, after the company reported a fall in fourth-quarter earnings. While China Life results were largely in line with forecasts, slower-than-expected growth in new business was a bearish sign, said analysts.