By V. Phani Kumar
HONG KONG (Jul 11) -- Hong Kong shares posted their steepest gain in three weeks Tuesday, with Geely Automobile Holdings spurred by a strong earnings projection while Chinese banks and insurance companies climbed after the central bank injected cash into the nation's money markets.
The Hang Seng Index added 1.1% to 25,786.35 by the midday break, on course for its best day since June 19. Geely jumped 4.3%, the gauge's top performer, after saying its half-yearly profit likely more than doubled late Monday, days after it raised its full-year sales guidance. China Construction Bank (CCB) and Industrial and Commercial Bank of China (ICBC) advanced at least 2.3%, helping boost a gauge of Chinese companies in the city 1.4%.
The People's Bank of China on Tuesday added 40 billion yuan ($5.9 billion) into the nation's money markets through reverse repos Tuesday, its first cash injection in 13 sessions. The net addition for the day is zero as the injection matches the amount drained through maturing securities. The central bank has refrained from open market operations in the recent past amid efforts to keep a tight leash on liquidity as policy makers strive to control financial risks.
"The rally today is quite short term," said Eugene Law, director at China Galaxy Securities. "In the long term, I think the Chinese government will continue to tighten their monetary policy, maybe in September or in October."
The yuan traded onshore was little changed against the dollar at 6.8039. The Shanghai Composite was down 0.2% by the midday break.
Most other regional markets were higher, with the Nikkei Asia300 Index rising 0.9% on technology shares after the Nasdaq Composite climbed overnight in the U.S.
In Hong Kong trading Tuesday, internet major Tencent Holdings jumped 1.4%, among the top contributors to the Hang Seng Index's point gains.
AIA Group climbed 2.4%, edging closer to the record high it reached last month. The insurer has started expanding its business in tier 3 cities in China, which have posted higher growth than in larger cities, The Standard newspaper reported, citing AIA Chief Executive Ng Keng Hooi.
Developer Sunac China Holdings surged more than 10% and was one of the most traded stocks on the exchange as it resumed trading, a day after agreeing to buy tourism projects and hotels worth about $9.3 billion from Dalian Wanda Group.
China Merchants Land added 0.6% following a near 50% jump in contracted sales for the April-to-June period. Logan Property Holdings gained 1.6% after its June contracted sales rose slightly to 3.83 billion yuan from the year ago period.
China Healthwise Holdings jumped 8.3% after the toys-and-electronic-products maker said it was terminating plans to acquire a unit of Eternity Investment. Eternity Investment was little changed.
Qianhai Health Holdings surged 17% after saying it expects to swing to a profit in the six months ended June 30.
Aux International Holdings shot up 28% to HK$1.42 after the club operator said it entered a placement agreement for up to 60 million shares at HK$0.91 apiece.
- By V. Phani Kumar; email@example.com; +852 3960 5102
- Edited By Suzannah Benjamin
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