HONG KONG (Nikkei Markets) -- Hong Kong shares rose for a fifth straight month, with Tencent Holdings and insurance companies driving gains while France's presidential elections and the U.S. Federal Reserve's rate outlook helped sustain momentum.
The Hang Seng Index climbed 4.2% in May, sealing its longest monthly winning streak in over four years. The gauge slipped 0.2% to 25,660.65 Wednesday, coming off 22-month highs. Internet giant Tencent added 9.9% this month after its March quarter earnings beat even the most optimistic estimates in a Bloomberg poll and positivity over its WeChat messaging platform sustained. Ping An Insurance Group jumped 14% and China Life Insurance rose 8.2% this month after mainland authorities announced plans to relax rules for investments into projects under the One Belt, One Road initiative. Tencent fell 2.6% on Friday, when Ping An shed 0.8% and China Life ended unchanged.
AAC Technologies Holdings was the month's worst performer, with a 28% drop. Trading in the stock has been halted since May 18 after short seller Gotham City Research accused the Apple supplier of using dubious accounting to smoothen margins and earnings.
The month got off to a positive start after pro-European Union Emmanuel Macron's victory in French elections improved sentiment toward risk assets. U.S. equity markets also rebounded to record highs despite a brief selloff amid mounting political turmoil in Washington D.C. Minutes of the Fed's May meeting bolstered speculation the central bank will be circumspect over its tightening path although they reinforced expectations for an increase in June as a near certainty.
"Everyone wants to be invested in equities right now and even the smallest of corrections that we saw in U.S. markets earlier was bought into," said Andrew Sullivan, managing director of sales trading at Haitong International Securities. "The same is true for Hong Kong. Investors do not want to miss out on the rally even as there are concerns over U.S. interest rates."
Belle International Holdings jumped over 15% this month after receiving a buyout offer at HK$6.30 that will take the footwear retailer private. The stock closed unchanged at HK$6.08 Wednesday.
The gains in May came despite a third consecutive monthly decline for Chinese equities that saw the Shanghai Composite shed 1.2% amid concern over authorities' efforts to rein in financial risks. Markets largely shrugged off a sovereign credit ratings downgrade by Moody's Investors Service. China's benchmark index added 0.2% Wednesday after factory activity data beat expectations and eased worries about a slowdown in the world's second-largest economy. The Nikkei Asia300 Index was down 0.3% on Wednesday.
Lenovo Group jumped 5.2% on Wednesday, reversing losses accumulated earlier in the month.
Developer Zall Group fell 1.3% to HK$4.62 on Wednesday after saying it will raise HK$1.5 billion ($190 million) through a private placement of 357 million shares at HK$4.2 apiece.
Chinese Estates Holdings jumped 15% to HK$14.9 after the property developer declared a special interim dividend of HK$2.91 per share.
Wang On Properties shed 1.9% after warning that net profit for the March quarter will be about 70% lower from a year earlier.
Perfect Shape Beauty Technology slid 3.7% Wednesday after forecasting an up to 40% drop in March quarter net profit.
-- Nimesh Vora and V. Phani Kumar
--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.