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Hong Kong shares rebound after US bond yields ease

Hong Kong shares rebound after US bond yields ease

HONG KONG: Hong Kong shares climbed on Friday as U.S. Treasury yields came off a four-year high, helping to lift the Dow Jones industrials overnight. Several property shares advanced. The Hang Seng Index was up 0.8% to 31,226.61 by midday. Forty-six of the gauge’s 51 constituents traded higher, with developer Country Garden Holdings rising 4% to lead gains in percentage terms, while Hang Lung Properties added 1.8%. Heavyweight Tencent Holdings gained 1%. PetroChina and China Petroleum & Chemical (Sinopec) increased 1.3% each, following a rise in U.S. crude oil prices on Thursday. Coal miner China Shenhua Energy climbed 2%.

The city’s main index has alternated direction each day so far this week amid renewed concerns about U.S. interest rates. The Dow Jones Industrial Average rose 0.7% overnight as the yield on 10-year Treasury notes slipped to 2.92% after touching a four-year high of 2.96% on Wednesday. Some participants, however, played down the potential impact from a further increase in the yields.

“The Hang Seng Index is having large daily fluctuations, but the overall trend is up,” said Francis Lun, chief executive at Geo Securities. “I don’t think the U.S. 10-year Treasury yield’s approach toward 3% will start another wave of sell-offs in global bond markets or stock markets. A rise of another 10 basis points won’t mean the world is ending.”

Shares in mainland China rose for a second day after a seven-day break for the Chinese New Year, with the Shanghai Composite Index up 0.1% by midday on Friday.

China Unicom (Hong Kong) rose 1% after saying it added a net 2.87 million mobile billing subscribers in January, bringing the aggregate number to 287.04 million.

Chinese conglomerate Fosun International added 0.4% after saying it bought a controlling stake in French couture label Lanvin.

Top Form International climbed 3% after the lingerie maker reported nearly a 12-fold year-on-year jump in net profit for the six months ended December to 19.8 million Hong Kong dollars ($2.5 million). Revenue for the period rose 21%.

REF Holdings jumped 15.3% after the financial printing services provider said it expects profit for 2017 to increase significantly compared with 2016.