China, Hong Kong stocks rebound; Vanke jumps as China Resources steps down

Source : REUTERS
Last Updated: Fri, Jan 13, 2017 11:01 hrs
China shares

SHANGHAI - China stocks were up on Friday morning, on course to snap a three-day losing streak, as the property sector rebounded strongly on strength in China Vanke Co Ltd's , the country's second largest developer.

Hong Kong stocks also rose, setting for a third week of gains, with support from the energy sector as oil prices advanced.

The benchmark CSI300 index rose 0.4 percent, to 3,330.61 points at the end of the morning session, while the Shanghai Composite Index gained 0.1 percent, to 3,122.93 points.

The benchmark index has lost more than 0.5 percent so far this week.

Investors cheered China Vanke Co Ltd's breakthrough in a high-profile corporate power tussle lasting for over a year, after its No. 2 shareholder China Resources Group decided to sell its entire stake to Shenzhen Metro Group.

Shares of the industry bellwether jumped around 7 percent on the mainland and 5.6 percent in Hong Kong at the lunch break.

But gains in China were limited as investors were awaiting the upcoming corporate earnings season to kick off late on Friday, to justify a flurry of solid economic data in the world's second largest economy.

Earlier this month, China's manufacturing sector posted a monthly expansion for the fifth time in December, but the pace slowed more than expected amid the government's effort to rein in soaring asset prices.

Sector performance in the mainland market was mixed, with property leading the gains, up around 2.3 percent.

Insurance firms retreated 0.6 percent despite their premium income rising almost 30 percent in 2016, as investors stayed cautious amid a tightening regulatory environment.

Metallurgical Corporation of China Ltd slid around 2 percent after closing at a six-week high in the previous session, as optimism fuelled by restructuring hopes quickly faded.

The tech-heavy ChiNext sub-index, China's equivalent of the Nasdaq, was set to lose for a seventh session and hit a six-month intraday low as faster approvals for IPOs boosted the supply of small-caps.

In Hong Kong, the Hang Seng index added 0.5 percent, to 22,932.47 points, bringing its weekly gain to around 1.9 percent, while the Hong Kong China Enterprises Index gained 0.7 percent, to 9,792.44 points.

Nearly all sectors in the city gained modestly, with the energy sector the biggest performer, up nearly 2.4 percent by the lunch break.

Oil majors including CNOOC Ltd and PetroChina Co Ltd rallied as oil prices held sharp gains from the previous two sessions.

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