Hong Kong shares post first monthly gain since January

Tue Apr 30, 2013 4:50am EDT

* HSI +0.7 pct, H-shares +1.2 pct

* HK, China closed on Wednesday, reopen on Thursday

* Beta plays recover Monday's losses ahead of China PMI

* Esprit ends above 200-day MA for 1st time since December

By Yimou Lee and Clement Tan

HONG KONG, April 30 (Reuters) - Hong Kong shares ended April at a seven-week high on Tuesday, with growth-sensitive sectors rebounding as investors covered short bets ahead of a public holiday and release of a survey of China's manufacturing activity.

Both the Hang Seng Index and China Enterprises Index recorded their first monthly gain in three, but the H-share index underperformed, hurt by a selloff in the commodities markets in mid-April and patchy China economic data.

On Tuesday, the Hang Seng Index rose 0.7 percent to 22.737 points, its highest close since mid-March. The China Enterprises Index of the leading Chinese listings in Hong Kong gained 1.2 percent.

In April, the Hang Seng benchmark rose 2.1 percent, while the H-share index barely ended up 0.2 percent with monthly turnover at the weakest this year. Tuesday's turnover was almost 10 percent below average.

Mainland China was shut on Monday and Tuesday and will stay closed until trading resumes on May 2. Hong Kong will also be closed for a public holiday on Wednesday.

"People are still not very confident on what's happening in China. That's why we see the divergence (in their monthly performance)," said Linus Yip, chief strategist at First Shanghai Securities.

On Tuesday, China Railway Group jumped 5.4 percent, more than erasing Monday's losses. Chinese banks were also stronger, with China Minsheng Bank climbing 1.8 percent.

Growth-sensitive counters rebounded after steep Monday losses following a series of underwhelming quarterly earnings that compounded the gloom from patchy economic data.

The HSBC China flash Purchasing Managers' Index (PMI) for April, released on April 23, unexpectedly fallen to 50.5 in April from 51.6 in March, stoking fears that a credit boom is not translating into desired growth.

China's official PMI will be released on Wednesday and the final HSBC reading on Thursday.

Tuesday's gains gave battered commodities counters some relief, helping them limit steep April losses after a recent plunge in the physical markets. Jiangxi Copper gained 0.8 percent on Tuesday but still shed more than 12 percent in April.

Zoomlion Heavy Industry Science and Technology Co Ltd gained 1.4 percent but slumped to its worst monthly showing since November 2011, losing 17 percent.

But China National Building Material bucked strength in growth-sensitive counters on the day, sliding 1.3 percent after JP Morgan analysts downgraded their view on its stock from "overweight" to "neutral."

They also cut their price target by 31 percent, believing the burden of its high financing costs will directly impact the company's bottom line.

Investors also chased Esprit Holdings higher for a second day after UBS had upgraded on Monday their view on the stock on optimism its new management will turn its business around soon.

Shares of the Europe-focused retailer climbed 3.4 percent to close above its 200-day moving average for the first time since Dec. 17 and at its highest since late January.

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