Hong Kong, China shares rise; set for biggest weekly gain since Sept
* HSI +0.4 pct, H-shares +0.5 pct, CSI300 +0.4 pct
* Melco Crown buoyed by solid Q4 result
* Tencent at record high in return to earnings visibility
* China Cinda tanks on 1st day of short selling in HK shares
By Clement Tan
HONG KONG, Feb 14 (Reuters) - Hong Kong shares edged up but were off the day's highs by midday on Friday, with the Macau casino, Chinese Internet and healthcare sectors among prominent outperformers.
Mainland markets also crept higher, rounding out strong gains this week as China and Hong Kong recovered from an emerging market sell-off late last month. Key benchmark indexes were set for their biggest weekly gains since September.
At midday, the CSI300 of the leading Shanghai and Shenzhen A-share listings was up 0.4 percent, while the Shanghai Composite Index rose 0.5 percent. On the week, they are each up more than 3 percent.
The Hang Seng Index gained 0.4 percent to 22,253.8 points, just shy of its 200-day moving average at about 21,494 points after having climbed nearly 3 percent this week. The China Enterprises Index of the top offshore Chinese listings in Hong Kong was up 0.5 percent after rising by as much as 1.3 percent earlier in the day.
"This is a dead cat bounce," said Hong Hao, Bank of Communications International's chief equity strategist. "Everybody's looking for a trade with the sell-off, but inconsistent China data does not seem to point to any meaningful improvement."
On Friday, official data showed China producer prices in January slid for the 23rd consecutive month by 1.6 percent from a year earlier. Consumer prices, on the other hand, were up 2.5 percent, level with December and slightly above expectations.
"It's hard to see the rally sustaining because it is difficult for long funds to participate without being able to consistently reallocate," Hong added. "It's still very much a stock picker market."
The Macau casino sector has been a market favourite for more than a year on its earnings visibility, but its share prices have corrected in the past month ahead of the upcoming earnings season on concerns that expectations may be excessive.
But on Friday, Melco Crown rose 0.7 percent after posting a 52.8 percent rise in full-year profit. Fourth quarter margins widened for the 10th quarter to 28.6 percent on its dominance in the premium mass market, according to Deutsche Bank analysts, raising their target price by 10 percent.
Chinese Internet giant Tencent Holdings rose 1.4 percent to a record high and has now jumped more than 4 percent this week after entering an agreement to explore e-commerce opportunities with Beijing Wangfujing Department Store .
Healthcare counters Shandong Weigao and Fosun Pharmaceutical outperformed, jumping 5.9 and 5 percent, respectively.
China Cinda Asset Management dived 3.5 percent on the first day that short selling was permitted on its shares since its December listing debut. Short selling accounted for more than 30 percent of its total turnover so far.
Citic Bank fell 1.4 percent in Shanghai and 1 percent in Hong Kong, trimming strong gains this week, after the mid-sized Chinese lender said media reports about its equity cooperation with Alibaba were "unfounded".
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