By Carrie Chen
HONG KONG (Feb 14) -- Hong Kong shares extended gains on Wednesday, as investors bought into local and mainland stocks tracking a global rebound ahead of the Chinese New Year holiday.
The Hang Seng Index added 2.3% to 30,515.60, its biggest single-day advance since May 2016. Chinese lenders extended their gains from Tuesday, with China Construction Bank (CCB) jumping 4.5%, Industrial and Commercial Bank of China (ICBC) rising 3.5% and Bank of China (BOC) increasing 2.6%. Heavyweight Tencent Holdings and HSBC Holdings climbed 2.7% and 2.6% respectively.
Chinese carmakers listed in Hong Kong rose after China's Ministry of Industry and Information Technology announced subsidy reductions for new energy vehicles, or NEVs, detailing large reductions for short-range vehicles and smaller reductions for long-range automobiles. The ministry also announced new requirements for batteries and energy consumption, setting higher entry barriers.
"The new energy vehicle subsidy adjustments should benefit large players," Daiwa Capital Markets' analysts Kelvin Lau and Jay Lu, wrote in a note. "We expect the policy to benefit automakers like BYD, which produces NEVs with a long driving range. Also, it is more likely to meet the new energy density requirement for batteries."
Electric carmaker BYD rose 3.6%, taking gains for the week to 7%. Brilliance China Automotive Holdings, Guangzhou Automobile Group and Dongfeng Motor Group, which also have interests in electric vehicles, rose 4.6%, 1.4% and 1.2%, respectively.
Gains for Hong Kong also came alongside the rest of Asia as a global selloff that rocked markets last week appeared to abate. The Nikkei Asia300 Index rose 1.1%.
In mainland trading, the Shanghai Composite Index and its Shenzhen counterpart added 0.5% each, while the onshore-traded yuan was flat at 6.3382 against the U.S. dollar. China's financial markets will be closed from Thursday to Feb. 21 for the Chinese New Year holiday, while Hong Kong's stock market will close after a half day's trading on Thursday and reopen on Tuesday.
Chinese search engine Baidu climbed 5.2% in after-hours U.S. trading following its better than expected fourth-quarter results. Net profit for the quarter that ended December rose 1% from a year earlier to 4.16 billion yuan ($656.1 million), helped by lower costs, while sales jumped more than 29% to 23.56 billion yuan, exceeding the top end of Baidu's own forecast in October.
U.S.-listed Chinese retailer JD.com on Wednesday said it is raising about $2.5 billion in a financing round for its unit JD Logistics as it seeks to expand its presence in areas such as automation, drones and robotics. Its shares had risen 1.9% in New York overnight.
Property developer China Resources Land added 3.5% after saying it acquired five land parcels in January, and its land premium payable was 7.09 billion yuan.
- By Carrie Chen; firstname.lastname@example.org; +852_39605150
- Edited By Suzannah Benjamin
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