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Nikkei Markets

Hong Kong stocks rise to highest level in almost a month

Sunny Optical climbs on April sales; SMIC up on Q2 outlook

HONG KONG (Nikkei Markets) -- Hong Kong shares rose to their highest level in nearly a month on Thursday, with energy producers and technology companies leading gains.

The Hang Seng Index added 0.9% to 30,809.22, its highest close since April 12. CNOOC and PetroChina and advanced 2.8% and 1.7%, respectively, tracking gains in global crude prices after the U.S. pulled out of the Iran nuclear agreement. Coal producer China Shenhua Energy led percentage gains on the index with a 3.4% climb.

Tencent Holdings rose for a third straight day, adding 2.9%. Apple supplier Sunny Optical Technology Group added 0.9% after saying it had shipped 35.4% more handset camera modules in April than a year before, as well as 60.9% more handset lenses.

Semiconductor Manufacturing International jumped 5.9% after saying it expects revenue for the second quarter to increase by 7% to 9% from a year before. The chipmaker reported a 57.9% drop in first-quarter profit at $29.4 million even as revenue climbed 2.8% to $831 million.

Regional energy producers lifted other regional equity benchmarks, with the Nikkei Asia300 climbing 0.3%.

U.S. crude prices jumped 3% overnight to levels not seen since November 2014, as the prospect of renewed U.S. sanctions on Iran eased oversupply concerns in a tightening oil market. U.S. sanctions on Iran, a major crude exporter, were lifted in 2015 after the nation signed a deal with powers including the U.K., China and Germany to curb its nuclear ambitions.

While the day's gains helped the Hang Seng Index erase losses accumulated earlier this month, some investors were cautious about U.S.-China trade relations.

"U.S.-China trade unfriendliness is a continuous worry factor, but elsewhere, investment sentiment has improved as compared to a month ago," said Ivan Li, research director at DBS Vickers. Hong Kong stocks have been supported by upbeat first-quarter earnings and a significant improvement in southbound flows through the stock connect links with mainland China over the last two days, he said.

Li said the Hang Seng Index saw its "short-term bottom" when it fell below 30,000 earlier this week. He expects a gradual rebound toward 32,000 and recommends buying Chinese insurers for their attractive valuations.

The Hang Seng China Enterprises Index rose 0.4% while the Shanghai Composite added 0.5% on the mainland.

Hang Seng Bank gained 2% in Hong Kong. The lender on Thursday said it will increase the preferential rate for new 12-month time deposits of HK$10,000 ($1,274) or more to 2% per annum with effect from Friday, reflecting growing competition for deposits amid rising interbank money market rates in the city. The bank currently offers 0.15% on 12-month time deposits for amounts from HK$10,000 through HK$999,999, according to its website.

China Resources Land fell 1.5%, trimming gains for the year so far to 25.9%, despite reporting a 34% increase in contracted sales for April. Fellow Chinese property developer Kaisa Group Holdings advanced 1.9% after saying contracted sales for April rose about 30.8% year-on-year to 4.28 billion yuan ($672.5 million).

Sino-Ocean Group added 2.9% following a 36% increase in April contracted sales.

Construction-materials maker Fullsun International Holdings Group fell 3.9% after saying it expects a "significant" increase in losses for the year ended March 31 from the year before.

Telecommunication-equipment maker ZTE on Wednesday said its "major operating activities" had ceased because of a U.S. ban on the sale of components. It said it has sufficient cash and is strictly adhering to commercial obligations while communicating with U.S. government departments. Trading in the company's shares remains suspended.

-- Amy Lam

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