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Hong Kong stock market rises ahead of blue-chip profit reports

Hong Kong stock market rises ahead of blue-chip profit reports

HONG KONG: Hong Kong stocks climbed during a heavily-traded morning session on Monday, driven by expectations that some of the largest listed companies will report strong profits this week. The Hang Seng Index rose 0.57 per cent, or 138 points, to 24,448 at the midday close, and the Hang Seng China Enterprises index climbed 0.57 per cent, or 60 points, to 10,573. Market turnover hit HK$56 billion, with software being the most traded sector. China Shenhua Energy, the country’s biggest coal miner, surged 16.04 per cent to HK$19.10 after it posted its first profit growth in four years on Monday morning and offered a special dividend of 2.51 yuan per share. Hannah Li, a strategist at UOB Kay Hian, said investors are becoming optimistic as a group of blue-chip companies prepare to report their earnings this week.

“The market is extremely active this morning,” Li said. “A large amount of capital is flowing into sectors with good fundamentals, such as tech, coal mining and telecommunication.” Tencent, which is due to post its results for 2016 on Wednesday, rallied 2.16 per cent to HK$226.8, while China Mobile rose 3.39 per cent to HK$90.1 ahead of its earnings report on Thursday. Beauty app maker Meitu was up 13.61 per cent to HK$20.45 following an 11-day winning streak. The company will report its profits on Friday. Among losers, footwear retailer Belle International dropped 4.61 per cent to HK$5.17 after warning of a 15 to 25 per cent drop in last year’s profits in a statement on Monday. Mainland China shares traded flat in the morning. The Shanghai Composite Index was up 0.07 per cent, or 2 points, at 3,239 while the blue-chip CSI 300 dropped 0.14 per cent, or 5 points, to 3,441.

The Shenzhen Component Index edged down 0.15 per cent, or 16 points, to 10,499, and the Nasdaq-style ChiNext fell 0.23 per cent, or 4 points, to 1,945. Property stocks were hurt by worries that more cooling measures may be on the way after more than 10 Chinese cities tightened curbs on buying this month to rein in soaring home prices. Beijing on Friday raised the minimum down payment ratio for second-time home buyers from 50 to 60 per cent. US markets fell slightly on Friday. The Dow Jones Industrial Average closed 0.1 per cent down at 20,915, and the S&P 500 also dropped 0.1 per cent to 2,379. The Nasdaq ended little changed at 5,901. Other Asian markets slipped during early trading on Monday. Australia’s S&P/ASX 200 dipped 0.33 per cent to 5,781 while South Korea’s Kospi edged down 0.47 per cent to 2,154. Japan’s stock market is closed today for a holiday.