By Amy Lam
Nikkei Markets
HONG KONG (Mar 01) -- Hong Kong shares headed higher after a choppy morning session on Thursday, as a recovery for heavyweight Tencent Holdings and mainland companies erased early losses stemming from lingering concern about a faster-than-expected pace of U.S. interest-rate increases.
The Hang Seng Index had gained 0.2% to 30,917.16 by the noon break, after falling as low as 30,453.82 earlier in the day. The gauge fell 1.4% on Wednesday, capping its worst monthly performance in more than two years. Tencent was up 2.4% on Thursday after falling as much as 1% in early trading. Agricultural Bank of China (ABC) rose 1.2% to lead the Hang Seng China Enterprises Index 0.2% higher by the lunchbreak. The gauge had fallen as much as 1.6% in the morning.
The interest-rate outlook for the U.S. has gripped global investors' attention recently, as the Federal Reserve, which has raised rates five times since December 2015, is widely expected to increase rates at least three times this year. Market interest in the Fed's roadmap has increased after Fed Chairman Jerome Powell's congressional testimony on monetary policy earlier this week highlighted his upbeat view of the U.S. economy and inflation. Powell will speak before the U.S. Senate on Thursday.
Paul Pong, managing director at Pegasus Fund Managers, expects the Hang Seng Index to continue reflecting "a new market expectation for four U.S. rate hikes in 2018," adding that he expects this phase to pass. "As the market digests the rate expectation, subsequent negative impact will get smaller."
In the mainland, the Shanghai Composite Index added 0.6% after two days of losses, while its Shenzhen counterpart climbed 0.9%. The onshore-traded yuan slipped 0.2% against the U.S. dollar to 6.3390.
Energy producers PetroChina and CNOOC lost 1.1% and 1.8%, respectively, in Hong Kong, after U.S. crude prices fell 2.1% overnight amid oversupply concerns.
Apple supplier AAC Technologies Holdings fell 1.3% after the technology-heavy Nasdaq Composite slipped 0.8% overnight.
Sino Land advanced 3.3% after saying that its net profit more than tripled to 10.37 billion Hong Kong dollars ($1.32 billion) for the half year ended Dec. 31, helped by one-off gains and a higher revaluation surplus on investment properties. It declared a special dividend of 45 Hong Kong cents a share for the July-December period.
Yuexiu Property climbed 5.8% after reporting a 46.8% increase in 2017 net profit to 2.26 billion yuan ($357.1 million). Revenue rose 14%.
Times China Holdings, formerly known as Times Property Holdings, rose 7% following a 68.5% jump in 2017 profit that it reported late on Wednesday. Contracted sales for the year climbed 41.9%. The developer expects to report contracted sales of 55 billion yuan during 2018, Chief Executive Officer Shum Chiu Hung, said at a press conference in Hong Kong on Thursday.
Pacific Basin Shipping jumped 9.6% after swinging to a net profit of $3.6 million in 2017, as its revenue rose 37%.
Casino operator SJM Holdings fell 1.3%, following a 15.6% drop in annual net profit.
Semiconductor company ASM Pacific Technology rose 4% after its net profit for the fourth quarter increased 18% to HK$457.9 million.
- By Amy Lam; amy.lam@NikkeiNewsrise.com; +852 39605150
- Edited by Suzannah Benjamin
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