Hong Kong shares rise on strong financials, China inches up

Wed May 28, 2014 12:54am EDT

Related Topics

* HSI +0.8 pct, H-shares +1.4 pct, CSI300 +0.2 pct

* Hong Kong markets lifted by U.S. data

* China software firms soar as govt looks to local brands

* Sands China down after shareholder sells stake (Updates to midday)

By Grace Li

HONG KONG, May 28 (Reuters) - Hong Kong shares climbed on Wednesday led by strength in financial stocks, tracking gains in other Asian markets as upbeat U.S. economic data lifted sentiment.

China shares eked out slim gains in choppy trade, buoyed by gains in property and software companies.

By midday, the Hang Seng Index was up 0.8 percent at 23,133.99 points, reaching a fresh 1-1/2-month high. The China Enterprises Index of the top Chinese listings in Hong Kong jumped 1.4 percent. If gains hold, this would be the best day in two weeks for the China Enterprises Index.

The CSI300 added 0.2 percent, while the Shanghai Composite Index was up 0.2 percent at 2,037.78 points. Both swung between negative and positive territory in the morning.

Strong gains in the financial sector drove Hong Kong's benchmark index up during the last hour of the morning session, as investors cheered upbeat U.S. economic data and another record close for the S&P 500.

Riskier asset markets were underpinned overnight after the United States reported an unexpected rise in durable goods orders in April and higher home prices for March. Services industries also grew at a rapid clip in May.

China Construction Bank Corp gained 1.3 percent and HSBC Holdings added 0.7 percent.

Sands China was the biggest index drag, losing 1.8 percent after U.S. fund manager Waddell & Reed Financial Inc said on Wednesday it raised $1.38 billion by selling its remaining stake in the Macau casino. The stock's trading volume was the highest since May 12. [ID: nL3N0OE06U]

Shares of software firms surged in the Chinese onshore markets, with YonYou Software jumping 6.3 percent and DHC Software up 3.9 percent, on hopes that China's increasing concern about Internet security will prompt a shift to domestic brands by governments and state firms.

Kingsoft gained 0.6 percent in Hong Kong ahead of its first-quarter results due later today.

China Vanke gained 1 percent. The country's top residential developer aims to list in Hong Kong in the second half of June, part of its effort to expand its business overseas and tap the offshore capital market.

Despite strength in the property sector, Chinese markets continued their tepid trend this week.

"Low interest and low volume would remain for some time. But in the longer run, we would probably have some upside in China," said Alex Wong, director of asset management at Ample Finance Group in Hong Kong. (Editing by Chris Gallagher)

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