HONG KONG (NewsRise) -- Hong Kong shares posted their biggest monthly gain since March as enduring optimism over U.S. economic policies and a stabilization in the yuan lifted sentiment, while a moderation in local borrowing costs helped spur property developers.
The Hang Seng Index ended little changed at 23,360.78 on Friday in a truncated session on the eve of the Lunar New Year. The gauge has risen 6.2% this month, also capping its best January since 2012. The local market is closed through Tuesday, while mainland Chinese bourses are shut for holidays from Friday through Thursday.
Sands China fell 1.7% on Friday after its parent Las Vegas Sands slumped 7.5% in U.S. trading overnight, following annual earnings that missed analyst estimates. Power Assets Holdings added 2.8% to HK$74.55, the day's top gainer on the index, after it declared a special interim dividend of HK$5 per share on Thursday. Its biggest shareholder Cheung Kong Infrastructure Holdings rose 2.1%, while CK Hutchison Holdings added 1.3%.
All but three of the Hang Seng Index's 50 constituents rose in January as U.S. stocks also headed for a monthly gain and as investors revived bets that President Donald Trump will unveil a fiscal stimulus. January also saw the yuan strengthen after three months of losses, as Chinese authorities imposed curbs on outflows and stepped up a battle against speculators with bearish wagers on the currency.
"With Hong Kong's open economy, strong U.S. growth and markets are a positive for local equities," said Sam Chi-Yung, senior strategist at South China Financial Group. "However, I think it is a good time for investors to consider taking profits as there could be a possible correction after the Chinese New Year break and U.S. interest-rate concerns come back after next week's Fed meeting."
The Federal Reserve will announce the outcome of its first rate-setting meeting this year on Feb. 1. At its last meeting in December, the central bank raised interest rates by 0.25 percentage points and projected a steeper path for further increases through 2019.
The offshore traded yuan slipped more than 0.1% to 6.8586 to a U.S. dollar in Hong Kong trading Friday, paring what is likely to be a record monthly gain for the currency. The Shanghai Composite had on Thursday ended its last trading session for January with a 0.3% increase, completing a monthly gain of 1.8%.
Hang Lung Properties has led the charge for Hong Kong equities and the city's developers this month, surging nearly 17%. The company on Thursday reported a 45% jump in its underlying net profit for 2016.
Among other real estate companies, Wharf Holdings soared almost 14% and Sino Land climbed 11%. The advances came as the Hong Kong Interbank Offered Rate with a three-month tenor slid back under 1% after touching eight-year highs in late December. Mortgage rates in Hong Kong are tied to Hibor.
"Demand remains quite strong and prices are also holding up in spite of concerns over higher rates," Sam said.
China Shenhua Energy climbed 13% in January amid optimism authorities' efforts to shut down small coal miners' operations would benefit the larger players. The company also issued a positive profit alert for 2016 Thursday.
China Mengniu Dairy was one of the few decliners this month, with a 2.4% loss, as investors reacted to the company's plans to acquire the stake it doesn't already own in China Modern Dairy Holdings.
Fosun International fell 1% in Friday's trading. Club Med, owned by the conglomerate, plans to open 15 new resorts worldwide in the next three years, Reuters reported, citing the holiday company's chief executive as saying at a news conference. Fosun still ended 7.8% higher in January.
Samsonite International fell 0.8%. The luggage maker is considering relocating some of its manufacturing to the U.S., a company director said in an email, according to Reuters. The move comes amid President Trump's push to create and return manufacturing jobs to the U.S.
The Nikkei Asia300 Index added 0.1% to 1,098.72 on Friday.
-- V. Phani Kumar and Nimesh Vora