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Tencent, HSBC push Hong Kong shares to fresh 21-month highs

HONG KONG (Nikkei Markets) -- Hong Kong shares climbed to fresh 21-month highs on Thursday, with Tencent Holdings leading the charge on expectations of robust earnings, while sanguine global markets underpinned investor appetite for risk assets.

The Hang Seng Index added 0.4% to 25,125.55, its second straight finish above the psychologically important 25,000-point level. Tencent, an index heavyweight, was the top contributor to the day's gains by points as it increased 1.7% to another all-time high. HSBC Holdings rose 0.9% after 10-year U.S. bond yields climbed overnight to their highest level in more than a month. China Life Insurance advanced 0.8% to its highest level since late March as government bond yields trade near two-year highs amid tight liquidity conditions.

Hong Kong equities have been well supported this week as a market-favored outcome of the French presidential elections and earnings-driven resiliency on the Wall Street keep investor spirits high. The performance has contrasted with mainland markets, which have been weighed down by a series of actions by policy makers to keep financial risks under control. Recent economic data on manufacturing and prices have also signalled a moderation in the nation's economic growth indicators. The Shanghai Composite Index ended 0.3% higher on Thursday, paring its losses over the past month to 6.9%.

"A chunk of the recent rally in the Hang Seng Index has been driven by Tencent on earnings expectations and by insurance and banking stocks on higher interest rate expectations," said Andrew Sullivan, managing director of sales trading at Haitong International Securities. "Chinese policy makers are showing a preference for stability over growth."

AAC Technologies suffered its worst decline since 2010, as it fell more than 10% after Gotham City Research accused the Apple supplier of using undisclosed related parties and dubious accounting to overstate profits since 2014. The stock didn't recover much from its day's lows even as the company said in its response that the charges were "inaccurate and misleading."

China Resources Power Holdings climbed 2.7% after saying that net generation of its subsidiary plants jumped 22% in April from the year-ago period.

Greenland Hong Kong Holdings climbed 0.8% after its contracted sales for the first four months of this year rose 61% from the same period a year earlier.

Pou Sheng International Holdings, a subsidiary of Pou Chen, the world's largest branded athletic and casual footwear manufacturer, added 4.5%. The company reported operating revenue of 1.91 billion yuan ($277 million) for April, compared with 1.61 billion yuan a year earlier.

Tongda Group tumbled 8.1% to HK$2.83 after saying that its substantial shareholder planned to sell up to 387 million shares, representing a 6.4% stake in the company, at HK$2.85 per share.

Qingdao Port International slid 1.4% to HK$4.32 after saying it will place new 243 million H-shares at the same price.

China Everbright Bank gave up 0.9% on news a unit of Cosco Shippingsold more than 21 million H-shares in the lender.

BBMG added 0.3% after a unit won bids for property projects totalling about 732 million yuan.

-- 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.

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