(Updates to close)
* HSI +0.5 pct, H-shares +1.4 pct, CSI300 +1.5 pct
* No strong Beijing policy support until March: Julius Baer
* China Coal hits 2-mth high in HK ahead of Q3 earnings
* Li & Fung jumps after more positive U.S. data
By Clement Tan
HONG KONG, Oct 18 (Reuters) - Hong Kong shares closed at a
seven-month high on Thursday on signs that the slowdown in
China's economy is stabilising, with growth-sensitive sectors
leading a sixth straight session of gains.
Official data showed the world's second-largest economy grew
7.4 percent in the third quarter from a year earlier, but
positive September industrial output and retail sales raised
hopes that the Chinese economy may have turned a
The Hang Seng Index ended up 0.5 percent at 21,518.7,
the highest close since March 2 and equalling a winning streak
recorded a year ago. The benchmark is now just 1.1 percent shy
of the 2012 intra-day high at 21,760.3, recorded on Feb. 20.
The China Enterprises Index of the top Chinese
listings in Hong Kong, also known as the H-share index, jumped
1.4 percent. Gains were stymied by chart resistance at about
10,673, the bottom of a gap that opened between May 4 lows and
May 7 highs.
In the mainland, the CSI300 Index of the top
Shanghai and Shenzhen listings ended 1.5 percent higher at its
highest close since Aug. 14. The Shanghai Composite Index
rose 1.2 percent.
"Investors have been adding more risk to their portfolio,
with funds trying to improve their performance as the year comes
to a close," said Alan Lam, Julius Baer's Greater China equity
"But with data suggesting growth in China has stabilised,
the current leadership will not see any need to act more
aggressively," Lam said, adding that strong action was only
likely to come after the leadership transition is completed in
Offshore China shares have outperformed mainland-listed
peers by 10 percentage points over the past month as foreign
investors, more sensitive to global central bank easing, put
money back to work quicker than China's domestic retail
But on Thursday, volume in Shanghai jumped 45 percent from
Wednesday and to its highest since Sept 14, in a sign that
onshore investors were gearing up for a fourth quarter rally
EARNINGS BACK IN FOCUS
China Coal Energy Co Ltd , the country's
second-largest coal producer, rose 2.3 percent to its highest
close since Aug. 8 in Hong Kong and 1.3 percent in Shanghai, as
investors rotated into laggard sectors ahead of the
third-quarter earnings season, starting next week.
After lagging the market for most of the year, China Coal
jumped 9.6 percent in Hong Kong last month and is now up 9
percent this month ahead of its third-quarter earnings, expected
It is still down 7.8 percent this year, compared to the 17
percent gain on the Hang Seng Index and the 7 percent gain on
the China Enterprises Index. China Coal is currently trading at
nearly half its historical median price-to-book value, according
to Thomson Reuters StarMine.
In the last 30 days, three of 35 analysts have shaved their
full year 2012 earnings-per-share estimate for China Coal by an
average of 10.2 percent, according to StarMine.
China Life Insurance slipped 1.1 percent in Hong
Kong after the world's largest insurer by market value issued a
profit warning late on Wednesday that signalled its first
quarterly loss since 2008.
Shares of Li & Fung, a global supply chain manager
for Walmart Inc and Target was the top gainer
among Hang Seng Index components.
It jumped 4.4 percent after better-than-expected U.S.
housing data on Wednesday followed positive retail sales data
earlier this week, but is still down more than 10 percent in
(Additional reporting by Vikram Subhedar; Editing by Sanjeev