Hong Kong shares inch up, poised for weekly gain

Source : REUTERS
Last Updated: Fri, Oct 05, 2012 19:03 hrs

(updates to midday)

* HSI up 0.3 pct, investors away China markets reopening

* Mining companies rise as gold hits 11-mth high

* Wharf, Cheung Kong, Swire weak in HK on slowing retail sales

* China Oilfield up 4.9 pct on rig buy report

By Vikram Subhedar

HONG KONG, Oct 5 (Reuters) - Hong Kong shares rose on Friday, putting them on track for a fifth straight session of gains, and poised to end the holiday-curtailed week higher as oil stocks, hit by lower crude prices, regained ground.

Caution ahead of U.S. payrolls data, however, kept trading activity light.

The Hang Seng index was up 0.3 percent to 20,972.57 points by the midday trading break with locally listed Chinese shares outperforming.

The China Enterprises index rose 0.8 percent, led by a recovery in oil-related stocks and strength in financials as well as auto stocks.

Shares of Hong Kong's top mall operator, Wharf Holdings, fell 2 percent while Swire Properties lost 1.2 percent after weak retail sales data pointed to lower spending by Chinese tourists. Both were the biggest losers on the Hang Seng.

Overall trading volumes remained light, however, ahead of the closely watched monthly employment report from the U.S., due at 1230 GMT, and forecast to show a rise of 113,000 jobs in September, but also a tick up in the jobless rate to 8.2 percent from 8.1 percent in August.

The Hang Seng's run of gains stretches back to last week because the market was closed on Monday and Tuesday due to public holidays. China's domestic markets will reopen next week.

The resumption of trading in China is likely to see shares higher as mainland markets play catch-up, said Alan Lam, greater China analyst at Julius Baer.

"Expectations of short-term economic stimulus policy in China after the 18th Party Congress in November should provide support for Chinese equities," said Lam in an email.

A once-in-a-decade leadership transition in China gets underway November 8.

Oil-related stocks recovered slightly from their slump over the past two sessions with Petrochina up 1.8 percent and Sinopec 0.8 percent higher.

China Oilfield Services rose 4.9 percent and was the biggest gainer on the China Enterprises index after an industry publication reported it had bought a second-hand rig to increase capacity.

Analysts at Nomura, who rate the stock a "buy", upgraded their earnings forecasts for the company on expectations of more purchases.

Shares of China's biggest gold mining company Zijin Mining rose 1.6 percent to their highest since March 19 as spot gold rose to an 11-month high. Smaller peer Zhaojin Mining rose 1.6 percent.

(Reporting by Vikram Subhedar; Editing by Sanjeev Miglani)

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