Hong Kong, China shares linger at multi-week highs ahead of April data

Tue May 7, 2013 5:23am EDT

Related Topics

* HSI +0.6 pct, H-shares +1 pct; CSI300 +0.2 pct

* Material sectors rally ahead of China April data dump

* Macau casinos lifted by SJM's positive Q1 earnings

* GOME jumps after rare profit alert

By Clement Tan and Yimou Lee

HONG KONG, May 7 (Reuters) - Hong Kong and China shares lingered at multi-week highs in choppy trade on Tuesday as investors brace for a slew of April Chinese data that could offer clues on the recovery in the world's second-largest economy.

But index gains came in weak bourse turnover, with several earnings-related announcements driving the more significant moves in the Macau casino and the Chinese consumer sectors on the day.

The Hang Seng Index ended up 0.6 percent at 23,047.1 points, stymied by chart resistance at the March 11 closing high at about 23,090.8. The China Enterprises Index of the top Chinese listings in Hong Kong climbed 1 percent.

"The 23,000 level is pretty strong resistance on the Hang Seng Index, so investors are taking some profits on the outperformers for now," said Larry Jiang, chief investment strategist at Guotai Junan International Securities.

The Shanghai Composite Index and CSI300 of the leading Shanghai and Shenzhen A-share listings each inched up 0.2 percent, staying at their respective highest in about two weeks.

Shanghai volume slipped for the first time in four sessions, but stayed just above its average in the last month. Hong Kong turnover equalled its 20-day moving average for the first time in more than a week.

Fresh impetus could come from a slew of April China data, starting with trade on Wednesday and inflation on Thursday, with money supply and loan growth expected from Friday.

On Tuesday, Chinese financials were broadly weaker after a recent strong run. CITIC Securities , China's largest listed brokerage, fell 3 percent from its highest in almost two months in Hong Kong.

But some growth-sensitive counters which have been battered recently saw the bigger percentage gains. Aluminum Corporation of China (Chalco) jumped 5.2 percent in its best day since Jan. 10, the height of the beta rally at the start of the year.

The H-share listing of Chalco, whose earnings visibility remains unclear given excess overcapacity and slowing demand, is still down 15 percent this year, compared to the 2.8 percent decline on the China Enterprises Index.

PATCHY CHINA RECOVERY

Earnings-related announcements drove some of the other more significant moves on the day in a sign that earnings recovery will be patchy and remain heavily company-specific.

Shares of Yue Yuen Industrial suffered their worst daily loss in more than four years, tumbling 12 percent to their lowest since last September after the sports shoe maker warned of a downturn in its first-quarter earnings due to rising costs and lower operating efficiency.

On the other hand, a rare profit alert lifted the shares of GOME Electrical Appliances, China's second-largest home appliance retail chain operator, up 4.9 percent to six-week highs.

SJM Holdings climbed 3 percent after the Macau casino operator posted a 12 percent year-on-year increase in first-quarter net profit late on Monday, spurring gains for much of its Macau rivals.

A total of 67 percent of all China-listed companies that have reported first quarter earnings have missed expectations with the materials and informational technology sectors accounting for the most disappointments, according to Thomson Reuters StarMine.

Previous upgrades in earnings expectations were led by the banking and utilities sectors, but with further upside seen limited for those sectors, any further upgrade optimism could be misplaced, said Goldman Sachs strategists in a note dated May 5.

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