Hong Kong shares up on Wall Street, earnings; China stocks slip

Wed Mar 26, 2014 12:56am EDT

* HSI +1.1 pct, H-shares +1.8 pct, CSI300 -0.1 pct

* Hong Kong financial stocks strong

* China Mengniu up on earnings results

* China pharmaceuticals rise on medical reform plans (Updates to midday)

By Alice Woodhouse and Natalie Thomas

HONG KONG/SHANGHAI, March 26 (Reuters) - Hong Kong shares rose early Wednesday, aided by gains on Wall Street and solid earnings reports from Agricultural Bank of China and dairy products giant China Mengniu.

But China indexes slipped a little, despite climbs by pharmaceutical counters, which were boosted by government subsidy plans for the sector.

By midday, the Hang Seng Index was up 1.1 percent at 21,965.61 points. The China Enterprises Index of the top Chinese listings in Hong Kong rose 1.8 percent.

The CSI300 fell 0.1 percent, while the Shanghai Composite Index was down 0.1 percent at 2,064.49 points.

Alex Wong, director of asset management at Ample Finance, described the good earnings reports as a "slight positive only" for the Hong Kong market. Investors right now "probably are expecting some stimulus" to boost a tepid economy but fundamentals remain weak, he said.

Shares in Agricultural Bank of China rose 3.4 percent in Hong Kong, to a one-month high, as investors took comfort in its decline in non-performing loans (NPLs) and increase in net interest margins.

In the mainland, pharmaceuticals rose as Premier Li Keqiang said China would step up medical reforms this year. A statement on the government web portal on Tuesday announced Beijing would increase the number of illnesses eligible for government subsidies and said the market for health insurance would be opened up.

The biggest gainers were Shanghai Fosun Pharmaceutical Group Co Ltd, up 3.2 percent, Yunnan Baiyao Group Co Ltd, by 2.4 percent, and Shan Dong Dong-E E-Jiao Co Ltd by 2.9 percent.

Shares in China's biggest supplier of dairy produce, China Mengniu Dairy Co Ltd, jumped 9.3 percent after the company reported better-than-expected 2013 profit. . Mengniu does not have a mainland listing.

Footwear retailer Daphne International tumbled 7.8 percent after the firm announced 2013 net profit declined 66 percent. (Editing by Richard Borsuk)