REFILE-Hong Kong shares at 17-mth high, China hovers at August peaks

Wed Dec 19, 2012 4:12am EST

* HSI +0.6 pct, H-shares +0.8 pct, CSI300 +0.1 pct

* China energy majors up on hopes for pricing reforms

* Consumer plays rise on reports of stimulus measures

* Financial A-shares weak, stall China rally

By Clement Tan

HONG KONG, Dec 19 (Reuters) - Hong Kong shares climbed to a near 17-month high on Wednesday as investors cheered signs that the U.S. can avert its "fiscal cliff" and welcomed Chinese news reports that Beijing planners want to give markets more freedom to determine energy prices.

On mainland markets, though, a three-day rally ran out of steam due to weakness in financial sector stocks after media reports said the banking regulator ordered banks to tighten checks on the sale of third-party financial products.

The Hang Seng Index closed up 0.6 percent at 22,623.4, its highest close since Aug. 1, 2011. Stiff chart resistance is next seen at about 22,800, peaks reached in July-August 2011.

The China Enterprises Index of the top Chinese listings in Hong Kong climbed 0.8 percent. It is now up 14.6 percent on the year, compared with the 22.7 percent jump on the Hang Seng Index.

In the mainland, the Shanghai Composite Index ended flat, while the CSI300 of the top Shanghai and Shenzhen listings edged up 0.1 percent to 2,371.1, its highest close since August.

A 12.4 percent bounce off Dec. 3's lowest point since early 2009 has moved the CSI300 edge into positive territory for the year. Now up 1.1 percent in 2012, it next faces chart resistance at around 2,412, peaks in August this year.

The Shanghai Composite Index is still down 1.7 percent on the year.

On Wednesday, Shanghai volume was the lowest since last Thursday, while Hong Kong turnover dipped below its 20-day moving average for the first time since Dec. 4.

"I think the market might be too optimistic on the pace of reform or additional policy support that the incoming Chinese leadership will take in 2013," said Edward Huang, Haitong International Securities' equity strategist.

"I won't be surprised if turnover drops off as we close out 2013 and people go on holiday, stalling the rally in Hong Kong," Huang added.

On Wednesday, state-run newspapers reported that China's National Development and Reform Commission, the powerful economic planner, vowed to further push resources price reform for refined oil, natural gas and coal among others.

China Shenhua Energy Co Ltd, the country's biggest coal producer, jumped 3.2 percent to its highest in a month in Hong Kong. It rose 1.2 percent in Shanghai.

The Australian Financial Review reported that Shenhua was told to come back with a full takeover offer after it had talked to Australia's Whitehaven Coal about taking a stake.

In Hong Kong, CNOOC Ltd rose 1.1 percent, while PetroChina gained 1.5 percent and China Petroleum and Chemical Corp (Sinopec) climbed 1.7 percent.

Chinese consumer stocks rose after state-run media carried comments from China's Ministry of Finance saying that consumption stimulus measures will be introduced in 2013 and reported a ministry estimates that retail sales rose 14.3 percent this year.

Haier Electronics rose 2.1 percent in Hong Kong, while Suning Appliance moved up 1.2 percent in Shenzhen.

Li Ning, the beleaguered Chinese sports brand that has shifted focus to the domestic market, surged 8.1 percent.

Chinese automakers were also strong on hopes of improved domestic demand in the lead-up to the Spring Festival in February 2013, the state-run China Securities Journal reported on its website.

The bigger gainers were those with joint ventures with Japanese counterparts, which rose on a weaker yen on the day.

Changan Auto, which has a JV with Suzuki, surged the maximum 10 percent in Shenzhen. Dongfeng Motor Group , with Nissan and Honda JVs, jumped 5.4 percent in Hong Kong.

ESPIRT TUMBLES AFTER WARNING OF LOSS

Bucking broader market strength, Esprit Holdings tumbled 4.5 percent to its lowest since Nov. 14 after the Europe-focused retailer warned of a possible loss for the six months ending in December, triggering a raft of broker downgrades.

Morgan Stanley downgraded Esprit to "underweight" from "equal weight" while revising its earnings forecast for the year ending June 2013 to a net loss of HK$144 million from a HK$695 million profit.

Chinese banking shares listed in the mainland were also weak, as investors took profit after the sector's recent outperformance. In Shanghai, Industrial and Commercial Bank of China (ICBC) shed 0.5 percent from a six-month high on Tuesday.

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