ArrowArtboardCreated with Sketch.Title ChevronTitle ChevronEye IconIcon FacebookIcon LinkedinIcon Mail ContactPath LayerIcon MailMenu BurgerPositive ArrowIcon PrintIcon SearchSite TitleTitle ChevronIcon Twitter
Stocks

Chinese financials carry baton as Hong Kong stocks near 26-month highs

HONG KONG (Nikkei Markets) -- Hong Kong shares headed toward 26-month highs on Tuesday, with Chinese insurers and banks driving gains as earnings expectations gather wind.

The Hang Seng Index added 0.7% to 27,524.07 by midday, on course for its highest close since early June in 2015. Ping An Insurance Group and China Life Insurance added at least 3.4%, with their Shanghai-listed shares also climbing 2.7% or more. The Hang Seng China Enterprises Index of large mainland companies jumped 1.8% to 11,021.34, heading for a close atop 11,000 for the first time since August 2015. Fourteen of the top 15 gainers on the 40-member gauge were financial stocks.

Strengthened earnings expectations have underpinned Hong Kong's stock rally of late, helped by a string of upbeat profit growth forecasts. While most large Chinese banks and insurance companies are due to report their interim results only towards the end of August, stable macroeconomic conditions and optimism over banks' loans portfolio are aiding speculation for improved earnings. China Merchants Bank, which last week reported an 11% increase in its preliminary first-half net income, climbed 2% in Hong Kong on Tuesday.

"Chinese financials are moving the market. For insurers, we can see their A-shares are doing well right now, and markets are expecting they will post good results," said Linus Yip, chief strategist at First Shanghai Securities. "For the first half of the year, some Chinese banks have already announced results, which have been good."

Among state-run lenders, Bank of China (BOC) rose 1.8%, while its larger peer China Construction Bank (CCB) added 1.2%. CCB has nominated BOC's boss Tian Guoli to replace Chairman Wang Hongzhang, who has reached retirement age, Reuters reported, citing three sources with knowledge of the matter.

The Shanghai Composite Index rose 0.4% in mainland trading. Growth in China's factory activity accelerated in July, a private survey showed Tuesday, after an official gauge indicated a slower expansion the previous day. The Caixin/Markit Manufacturing Purchasing Managers' Index for last month printed at 51.1, ahead of June's 50.4 reading. The Nikkei Asia300 Index of more than 300 companies in the region was up 0.5%.

PetroChina, China Petroleum & Chemical (Sinopec) and CNOOC added at least 0.8% each after U.S. crude prices on Monday settled above $50 a barrel for the first time since May. Meanwhile, Morgan Stanley raised the energy producers' price targets by at least 2%. The bank raised PetroChina's rating to overweight from equalweight, while retaining Sinopec as its top pick.

Television maker TPV Technology slumped 18% after saying it expects to swing to a loss in the June quarter.

Minmetals Land climbed 5% after saying its first-half profit likely increased more than 50%.

Courage Marine Group jumped 6.6% after the marine-transportation services company said it its first-half loss is expected to narrow from a year ago.

Zhongyu Gas Holdings surged 9.2% after saying it expects first-half profit to at least double.

Genting Hong Kong, a part of Malaysia's Genting, slid 7.4% after saying it expects a loss of $200 million to $220 million in the first half of 2017, almost three times wider than the year-ago period.

-- Suzannah Benjamin and V. Phani Kumar

Sponsored Content

About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this monthThis is your last free article this month

Stay ahead with our exclusives on Asia;
the most dynamic market in the world.

Stay ahead with our exclusives on Asia

Get trusted insights from experts within Asia itself.

Get trusted insights from experts
within Asia itself.

Get Unlimited access

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this month

This is your last free article this month

Stay ahead with our exclusives on Asia; the most
dynamic market in the world
.

Get trusted insights from experts
within Asia itself.

Try 3 months for $9

Offer ends June 30th

Your trial period has expired

You need a subscription to...

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers and subscribe

Your full access to the Nikkei Asian Review has expired

You need a subscription to:

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers
NAR on print phone, device, and tablet media