China tax cuts end Hong Kong share losses
HONG KONG (Nikkei Markets) -- Hong Kong stocks headed for their first gains in four days after China announced fresh tax cuts, with traders saying that current global uncertainty had already been priced in.
The Hang Seng Index rose 0.4% to 23,921.39 in trading Thursday morning, with heavyweights AIA Group and Tencent Holdings each rising at least 1.7%. China Unicom (Hong Kong) added 1.2% after German automotive supplier Continental said the two had agreed to set up a Shanghai-based joint venture to offer intelligent transport systems. CNOOC fell 1.4% and PetroChina lost 0.9% following a 3.5% slump in Brent crude prices overnight.
The Shanghai Composite was down less than 0.1% after rising as much as 0.2% earlier. Beijing's move to cut taxes on businesses and individuals by about 380 billion yuan ($55 billion) this year to spur growth and boost spending in Asia's largest economy helped boost investor sentiment after a regulatory clampdown had sparked a four-day selloff in Chinese equities. Authorities moved to simplify the country's value-added tax structure, cutting the number of brackets to three from four. Officials at a State Council meeting on Wednesday also said individuals buying commercial health insurance will receive certain tax exemptions.
Thursday's advance in Hong Kong shares comes after the benchmark index shed 2% over the last three trading days, weighed down by losses in mainland equities and concern about escalating regional tensions over North Korea. Other Asian markets also staged a rebound Thursday, with the Nikkei Asia300 Index rising 0.3% for its first advance in four days.
"The index has already had a correction, and today's rebound is mostly a reflection of investors reckoning that a lot of overall uncertainty has been discounted," said Linus Yip, strategist at First Shanghai Securities. "Also, the good news out of China relating to tax cuts and stability in mainland markets is helping."
China Petroleum & Chemical (Sinopec) edged 0.3% lower Thursday. Sinopec, PetroChina, sovereign wealth fund China Investment Corp. and state-run lenders are part of a consortium being created to invest in Saudi Aramco's initial public offering, Reuters reported, citing people with knowledge of the discussions. The report said that Beijing is pushing for a listing of the issue, expected to be the world's largest, in Hong Kong. Hong Kong Exchanges & Clearing gained 0.4%.
Ant Financial, an affiliate of Alibaba Group Holding, has acquired Singapore-based helloPay Group. Alibaba shares, hovering close to a one-year high, fell 0.4% in U.S. trading on Wednesday.
China Vanke slipped 1.4% Thursday. The property developer has agreed to buy a stake in Chinese real estate agency Lianjia for 3 billion yuan, Reuters reported.
Yanzhou Coal Mining edged 0.1% lower, but remains up more than 13% for the month so far. It said net profit for the first quarter is expected to have increased by up to 600%.
Property company Henry Group Holdings slid 6.8% after saying late Wednesday that talks with potential investors in a planned share issue had been terminated. The stock was suspended from trade Wednesday afternoon.
Jeweler Luk Fook Holdings International edged 0.2% lower despite reporting a 2% rise in same store sales for the March quarter.
Fosun International rose 1.6%. China Development Bank is considering financing a Fosun-led consortium's purchase of a stake in Russian gold producer Polyus, Reuters reported, citing two people familiar with discussions about the potential deal.
Leshi Internet Information & Technology late Wednesday reported a 3.2% decline in net profit for 2016. Trading in the company's shares has been suspended since Monday.
-- Nimesh Vora
--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.