HK Shares End Slightly Up as Chinese Banks Gains Further

Further gains in Chinese banks on a positive earnings outlook pushed Hong Kong stocks slightly higher Thursday.

The blue-chip Hang Seng Index rose 16 points, or 0.07 percent, to 21,821.78 after trading between 21,498.87 and 22,020.66 during the session.

Turnover totaled 74.18 billion HK dollars (9.51 billion U.S. dollars), down from 74.55 billion HK dollars (9.56 billion U.S. dollars) Wednesday.

Traders said valuations for local stocks are attractive given the recent decline in the market, and they expect shares to recover on bargain hunting before the Beijing Olympics in August.

The Hang Seng Index has fallen 22 percent since the beginning of this year. Investors are finding good bargains when the benchmark index declines to near 21,000, according to analysts.

The benchmark Shanghai Composite Index, which tracks both A and B shares, ended down 1.5 percent at 2,875.45 Thursday on profit-taking following three days of gains due to a correction in the heavyweight banking sector.

Phillip Securities research director Louis Wong said that a more positive outlook in the China markets will continue to support buying interest in the local bourse and that the benchmark Hang Seng Index could gradually recover to about 22,500 in July.

Chinese banks rose for the second consecutive day on strong earnings guidance. Industrial and Commercial Bank of China rose 1.1 percent to 5.46 HK dollars after rising 5.1 percent Wednesday and China Construction Bank gained 2.6 percent to 6.36 HK dollars after rising 4.9 percent in the previous session.

Bank of China ended 1.2 percent higher at 3.48 HK dollars after it rose 3.9 percent the day before, and Bank of Communications rose 1.7 percent to 9.37 HK dollars on top of a 5.1 percent rise Wednesday.

Heavyweight China Mobile dropped 1.7 percent to 102.40 HK dollars on profit-taking after it rose 1.5 percent Wednesday.

Handset contract maker Foxconn International fell 5.2 percent to 6.23 HK dollars after Lehman Brothers trimmed its price target sharply to 7.10 HK dollars from 22.00 HK dollars.

The U.S. brokerage said the company is facing challenges including slowing global mobile handset demand, margin pressure from rising costs, and a product mix change.

Source: CRIEnglish