(Updates to close)
* HSI +0.2 pct, H-shares -0.3 pct, CSI300 +0.6 pct
* Profit taking hits China banks, BOC off 52-wk high in HK
* Investors rotate heavily into HSBC, StanChart
* 4th straight gain buoys Galaxy Entertainment to record
By Clement Tan
HONG KONG, Dec 20 Hong Kong shares ended at
their highest level in nearly 17 months on Thursday trade, as
investors rotated into HSBC Holdings and Standard Chartered
after taking profits in Chinese banks that outperformed
Onshore Chinese markets reversed midday losses to crawl
higher, holding at four-month highs for a fifth-straight session
on strength in resource counters after state media reported rare
earth quotas will stay steady in 2013.
The Hang Seng Index closed up 0.2 percent at
22,659.8, reversing midday losses to stay at its highest since
Aug. 1, 2011, but trading volume was low. Chart resistance is
next seen at about 22,800, peaks last seen in July-August 2011.
The China Enterprises Index of the top Chinese
listings in Hong Kong slipped 0.3 percent.
In the mainland, the CSI300 of the top Shanghai
and Shenzhen listings gained 0.6 percent to 2,384.8. The index
is now up 1.7 percent in 2012 having spent most of the year in
negative territory. It next faces chart resistance at around
2,412, the peaks seen in August this year.
The Shanghai Composite Index edged up 0.3 percent.
Both onshore Chinese indexes reversed midday losses, staying
at their respective highest since August.
Shanghai volume improved slightly from Wednesday, but
totalled just more than half of last Friday's when onshore
Chinese markets had their best day in more than three years.
Hong Kong turnover was at its second weakest since Dec. 4
and was some 7 percent below its average in the last month as
doubts reemerged over progress on averting a fiscal crisis in
the United States.
"Trading at this time of the year can be quite tricky," said
Jackson Wong, Tanrich Securities' vice-president for equity
sales. "Investors are rotating out of outperformers today and
into some laggards on some Chinese policy catalysts."
Chinese banking plays that have overperformed were weak in
both China and Hong Kong markets. Sentiment toward banks took a
knock after the mainland's banking regulator ordered them to
tighten checks on sales of third-party financial products.
Having touched 52-week intra-day highs twice earlier this
week, Bank of China (BOC) slipped 0.6
percent in Hong Kong, and 0.7 percent in Shanghai.
Growth-sensitive counters were also weak. Anhui Conch Cement
slid 2.9 percent in Hong Kong, recording a
third-straight daily loss after hitting its highest intra-day
levels on Monday since November 2011.
In Shanghai, Anhui's shares shed 1.2 percent.
CHINA POLICY PLAYS STRONG
Inner Mongolia Baotou Steel Rare-Earth Group
jumped 6.9 percent after the state-owned China Daily reported
industry leaders as saying export quotas for rare earth metals
will hold steady next year.
Strength in other rare earth producers helped onshore
Chinese indexes reverse midday losses, with the CSI Materials
sub-index an outperformers among sectors, rising 1.5
Chinese alternative energy counters extended gains after
mainland news outlets reported on Wednesday that Beijing
approved a second group of wind power projects.
The state-run China Securities Journal newspaper reported on
Thursday that the State Council has issued new measures to
support the solar industry, including subsidies and tax breaks
to also benefit the wind power industry.
China Longyuan Power Group climbed 2.5 percent in
heavy volume in Hong Kong, but it is still down 12.4 percent on
the year, compared to the 22.9 percent gain on the Hang Seng
Galaxy Entertainment Group jumped 4 percent to a
record closing high, posting a fourth-straight daily gain after
Deutsche Bank analysts upgraded on Monday its target price by
(Editing by Simon Cameron-Moore)