* HSI +0.2 pct, H-shares +0.5 pct, CSI300 +0.1 pct
* China property weaker due to correction from recent gains
* Cheung Kong at 6-year high helped by drop in U.S. bond
* HK, China shut on Monday for Dragon Boat Festival
(Updates to midday)
By Grace Li
HONG KONG, May 30 Hong Kong shares are set to
end their best month this year on Friday, underpinned by
strength in property developers and Chinese banks.
China shares reversed earlier losses in late morning trade,
even as the property sector remained a drag.
Hong Kong and mainland benchmark indexes are still down on
the year, with markets awaiting China's official manufacturing
purchasing managers' index for May due on Sunday, which is
likely to have inched up to 50.6 in May from April's 50.4,
according to a Reuters poll.
"Hong Kong market is still very cautious, trading on good
news that Wall Street still broke the record. However, A-shares
are not moving, holding back the Hong Kong market," said Jackson
Wong, vice-president of Tanrich Securities, adding that
investors tend to take profits before the holiday.
Both Hong Kong and China markets will be closed on Monday
for the Dragon Boat Festival.
By midday, the Hang Seng Index rose 0.2 percent to
23,062.25 points, while the China Enterprises Index of
the leading offshore Chinese listings in Hong Kong climbed 0.5
percent. They are headed for their best month this year, up 4.2
and 4.7 percent, respectively.
The CSI300 of the largest Shanghai and Shenzhen
A-share listings was up 0.1 percent and is set for a flat finish
in May, while the Shanghai Composite Index was flat at
2,040.64 points but is so far up 0.7 percent on the month.
Chinese property developers were the big index drags as
investors took profits on recent gains. Risesun Real Estate
Development lost 2.3 percent in Shenzhen, and Poly
Real Estate Group shed 1.0 percent in Shanghai.
In contrast, Hong Kong developers outperformed, with Cheung
Kong Holdings up 1.7 percent to its highest since
January 2008. Sun Hung Kai Properties also added 0.9
Analysts say both internal and external factors contributed
to the sector's rally. U.S. bond yields slipped to 11-month lows
on Thursday, indicating low interest rate is going to stay for
longer than expected. A recent relaxation on housing curbs by
the Hong Kong government also shows that the tightening cycle is
off its peak.
In the Chinese onshore market, Xinjiang related stocks
surged as China vowed to strengthen development in the restive
northwestern region. Xinjiang Sayram Modern Agriculture
soared 9.9 percent, while Xinjiang Haoyuan Natural
Gas jumped 8.2 percent.
Chinese President Xi Jinping said on Thursday that China
must strengthen education and work to alleviate poverty in the
western region of Xinjiang, as the government works to weed out
extremism in a region prone to unrest.
(Editing by Jacqueline Wong)