HONG KONG (Nikkei Markets) -- Hong Kong shares scaled fresh 22-month highs as investors interpreted discussions at the U.S. Federal Reserve's latest meeting as suggesting the central bank may raise rates in June, but remain cautious beyond.
The Hang Seng Index rose 0.8% to 25,630.78. Lenovo Group jumped 3.7% for its best session in two months after reporting a narrower-than-expected drop in fourth-quarter net income and turning a profit for the year ended March 31. A gauge of mainland companies listed in Hong Kong advanced 1.7% in its best performance since March, paced by financials. Ping An Insurance Group climbed 3.4% and China Construction Bank (CCB) added 1.9%. The Shanghai Composite, which has lagged most regional peers over the last two months amid efforts by authorities to rein in leverage, rose 1.4% for its best session in seven weeks.
U.S. stock futures pointed to a sixth day of gains on Wall Street after the Fed's May meeting minutes showed most participants backed removing policy accommodation "soon" if economic data met expectations. While futures prices continue to signal a rate increase next month as a near certainty, equity markets in Hong Kong and mainland China have proven resilient, even shrugging off sovereign ratings downgrades by Moody's Investors Service.
"Economic data out of the U.S. has not been too strong. While the odds of a rate hike next month are high, the outlook for further hikes is quite uncertain," said Banny Lam, head of research at Hong Kong-based CEB International Investment.
A fall in U.S. Treasury yields following the Fed's minutes boosted local developers, with Wharf Holdings, a unit of Wheelock, rising 1.1% to pace advances among its peers. Mainland developers extended gains amid bets recent measures to cool property prices won't hurt demand much. China Resources Land and China Vanke rose at least 3% each.
Tsingtao Brewery surged 13% to HK$37.70. Macquarie reportedly upgraded the stock's rating to outperform from neutral and raised its price target to HK$37 from HK$29.6.
Yanzhou Coal Mining rose 1.5% after it made a separate offer related to its acquisition of Coal & Allied from Rio Tinto. Its Australian subsidiary offered $710 million to HVOR to acquire their 32% interest in a joint venture majority-owned by Coal & Allied.
Shenzhen Investment ended 0.8% higher after saying that it expects an after-tax gain of HK$2.9 billion ($372 million) from the sale of four property and hotel assets to China Evergrande Group for 5.42 billion yuan ($788 million). China Evergrande shares rose 2.4%, in line with other mainland property stocks.
Logan Property rose 0.7%. The property developer said it will issue $350 million of perpetual capital securities. S&P Global Ratings on Thursday said the issue of the dollar-denominated securities will not affect its rating.
Synergis Holdings fell 1.7% after the interiors and property management company said it expects to record a loss for the six months ended June 30.
Capital VC lost 1.1% after reporting a loss of HK$62.3 million for the six months ended March 31.
Amax International Holdings slumped 7.4% to HK$0.44 after the gaming-and-entertainment-business investor announced a private placement of 16 million shares at HK$0.43 apiece.
Alibaba Group Holding and its affiliate Ant Financial Services plan to lead a funding round of at least $1 billion in Ele.me, a Chinese food delivery service, Bloomberg reported, citing people familiar with the matter. Alibaba shares fell 0.1% in U.S. trading Wednesday.
-- 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.