Hong Kong shares set for first gain in four days after US rebound
HONG KONG (Nikkei Markets) -- Hong Kong shares headed for their first gain in four days following positive overnight cues from Wall Street, with heavyweight Tencent Holdings providing a thrust as it climbed toward another record high.
The Hang Seng Index rose 0.3% to 25,215.45 by midday. Tencent Holdings advanced 2.1%, extending gains following better-than-expected quarterly earnings. The technology major has enhanced functions of its messaging app WeChat to allow Chinese users to synchronize content to Facebook and Twitter, South China Morning Post reported. China Evergrande Group, among China's largest developers by sale, jumped 10% after Standard & Poor's raised its credit rating to B from B- and revised the outlook to stable from negative. Hong Kong rail operator MTR fell 2.3% after service along an important commuter line in the city was disrupted late Thursday following a power failure.
BOCOM International Holdings, a unit of Bank of Communications, rose 1.5% to HK$2.72 on its debut from an initial public offering price of HK$2.68. Bank of Communications was up 0.2%.
U.S. stocks rebounded Thursday from a slump sparked by worries that President Donald Trump's reported interference in a federal investigation will eclipse his economic agenda. On Thursday, Trump denied allegations that he had asked former Federal Bureau of Investigation director James Comey to shut down an investigation into his former national security advisor.
"At present, I believe Hong Kong stocks are still in a good place," said Linus Yip, chief strategist at First Shanghai Securities. "Trump is facing a wave of governance crisis. At this stage, the situation is not a fatal blow, but we need to continue to monitor it closely."
In the mainland, the Shanghai Composite shed less than 0.1% and the Shenzhen benchmark was 0.2% lower. The onshore traded yuan fell less than 0.1% against the dollar to 6.8925.
Shenzhen-listed electronics major TCL said it plans to buy a minority stake in its unit Shenzhen China Star Optoelectronics Technology as part of a planned asset restructuring. Trading in the company's shares has been suspended since April 21.
Alibaba Group Holding ended a choppy U.S. trading session with a 0.5% gain after falling as much as 5.5% earlier. The e-commerce major reported a better-than-expected 60% surge in March quarter revenue, but its earnings missed estimates. Alibaba also announced a buyback plan of up to $6 billion over two years. HSBC maintained its buy rating and raised its target price by 16% to $145 after the results.
Alibaba Health Information Technology jumped 10% to HK$3.75. Alibaba Group, its controlling shareholder, will sell its wholly-owned health unit Ali JK Nutritional Products for HK$3.8 billion ($488 million) in exchange for 1.19 billion Alibaba Health shares at HK$3.2 apiece.
Other Chinese developers listed in Hong Kong also performed strongly amid a rally in China Evergrande, with Sunac China Holdings jumping 7.4% and Country Garden Holdings climbing 6.6%. China Overseas Land & Investment rose 2.3%.
Swire Pacific rose 0.3%. The conglomerate is not ruling out the prospect of spinning off its hotel business, Chairman John Slosar said at a shareholders' meeting Thursday, according to The Standard.
China Mengniu Dairy lost 0.4%. The dairy product manufacturer announced a $194 million issue of bonds, which are convertible into shares of its unit China Modern Dairy Holdings. China Modern shares slumped 6%.
-- Nimesh Vora and V. Phani Kumar
--Nikkei Markets is a real-time financial news service for South East Asia's markets published by Nikkei NewsRise Asia Pte Ltd, a Nikkei and NewsRise joint venture company. Nikkei Markets provides wide companies coverage in the region, including the Nikkei's Asia300 companies.