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Nikkei Markets

Hong Kong shares resume gains amid China stimulus hopes

Cloud services company Weimob rises in debut, while Chengdu Expressway slips

HONG KONG (Nikkei Markets) -- Hong Kong shares advanced on Tuesday, as Chinese companies rallied after Beijing indicated its plans for more growth-supportive policies.

The Hang Seng Index added 2% to 26,830.29 after it halted a six-day rally on Monday, dropping 1.4%. Internet heavyweight Tencent Holdings rose 2.6%, while pan-Asia insurer AIA Group advanced 3.7%. The two stocks contributed most to the gauge's gains by points. China Life Insurance added 4.3% after reporting a 4.7% increase in accumulated premium income for 2018.

The Hang Seng China Enterprises Index of large mainland companies listed in Hong Kong climbed 2%, while the Shanghai Composite Index added 1.4%. Officials from the People's Bank of China, the National Development & Reform Commission and China's Ministry of Finance on Tuesday indicated that Beijing would lend further support to boost Asia's largest economy.

The central bank plans to keep a "reasonable balance" in its monetary policy, PBOC Vice Governor Zhu Hexin said, adding that the authority aims to keep liquidity "reasonably ample" and maintain "reasonable growth" in monetary credit and social financing. Meanwhile, NDRC Vice Chairman Lian Weiliang said the government will implement large-scale tax and fee reductions. The news conference in Beijing came a day after data showed an unexpected dip in China's trade numbers for December.

"Market participants are envisioning further monetary easing and fiscal stimulus measures" after Monday's weak data, said Daniel So, strategist at CMB International Securities. "It is very likely that market participants are believing their words and expect more liquidity easing measures, including open-market operations."

There is also the "psychological effect" of the cut in mainland Chinese banks' reserve requirement ratio taking effect, So added. The first stage of the PBOC's 100-basis-point RRR cut, announced earlier this month, took effect Tuesday. The second stage will take effect Jan. 25.

The yuan traded onshore climbed 0.2% to 6.7544 against the U.S. dollar.

Chow Tai Fook Jewellery Group fell 1% in Hong Kong. The jeweler on Monday said its same-store sales for the December quarter fell 7% in China and 6% in Hong Kong and Macau. It reported a 1% increase in retail sales value growth for mainland China during the period, but said retail sales value declined 1% in Hong Kong and Macau.

Shares of Weimob rose 4.6% in their Hong Kong trading debut after the cloud services company raised HK$844.8 million ($108 million) in gross proceeds from an initial public offering.

Meanwhile, shares of Chengdu Expressway, also making its debut in Hong Kong on Tuesday, slipped 0.9%. The company had raised HK$880 million from its IPO.

Food-and-beverage services provider Tsit Wing International Holdings jumped 30.8% after forecasting an up to 60% increase in net profit for the year ended Dec. 31, 2018.

Aluminum products maker China Hongqiao Group advanced 3.5% to HK$5.02 after saying it bought back 620,000 shares in a price range of HK$4.79 to HK$4.80 on Monday.

China Southern Airlines edged 0.8% higher after reporting a 6.9% increase in passengers carried during December.

New China Life Insurance added 3.6% following a 12% increase in accumulated gross premium income for 2018.

Shandong Xinhua Pharmaceutical rose 2.5% after reporting a 20% increase in 2018 net profit.

-- Amy Lam

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