* Hang Seng up 2.2 pct, Shanghai snaps 8-day losing streak
* Alternative energy plays rise on German plan to shutter
* Hutchison up 5 pct on report of Husky Energy HK IPO
* China mutual funds still cautious on equities: Reuters
(Updates to close)
By Vikram Subhedar and Clement Tan
HONG KONG, May 31 Hong Kong and China shares
jumped on Tuesday, swept up in a broad rally across Asian
markets, with gains driven by power and energy sectors while
improving volumes suggested more investors were stepping back
into risky assets.
Germany's plan to shut all nuclear reactors by 2022 lifted
alternative energy companies, such as wind-turbine makers, while
a tariff hike in China to tackle a severe electricity shortage
drove up shares of power producers and coal suppliers.
The Hang Seng index rose 2.2 percent, its biggest
single-day gain this year. The index, which had appeared to be
headed for its worst monthly performance since last August,
ended down just 0.2 percent for May.
Turnover on the exchange rose to HK$90 billion, the highest
since April 6, although part of the jump was due to passive
investors adjusting portfolios to reflect changes in the MSCI
China index which became effective after the close.
Traders said there was chatter in the market that China's
manufacturing data for April, scheduled to be released on
Wednesday, would be stronger than expected.
Manufacturing activity in China is expected to slow
month-over-month but still show expansion for the 27th straight
month according to a Reuters survey. [ID:nL3E7GR0LK]
"China's PMI is the wildcard," said a Hong Kong-based
trader, adding that with reports of fresh financial aid for
Greece and short-term rates in China falling, markets could
extend gains as June has historically been a good month for
Shares of Hutchison Whampoa rose 5 percent on
nearly 5.5 times their average 30-day volume on reports that
Canadian oil producer Husky Energy , in which Hutch has
a 35 percent stake, was planning a Hong Kong listing.
Chinese power producers rose, led by China Resources Power's
2.7 percent gain, on the announcement of tariff hikes
while soaring demand for coal underpinned the moves higher in
coal producers. Yanzhou Coal rose 4.7 percent while
larger rival China Shenhua jumped 3.2 percent.
SHANGHAI RECOVERS, ALT ENERGY UP
China shares snapped an eight-session losing streak, boosted
by outperforming alternative energy stocks and bargain hunting
among oversold industrial plays.
Germany's plans to shut down all its nuclear reactors by
2022 lifted solar and wind-power companies across Asia.
Sinovel Wind Group Co , China's biggest maker of
wind turbines with a US$8.6 million market cap, recorded its
biggest one-day gain, jumping 7.7 percent in more than two times
its 30-day average volume.
China Longyuan Power Group Corp Ltd , the world's
fifth-largest wind power generator, jumped 2.7 percent on over
twice its average-30 day volumes in Hong Kong.
Solar plays also jumped. GCL Poly Energy , the
country's largest polysilicon company, bounced 5.3 percent
paring its monthly losses to 24.5 percent.
A-share turnover picked up on Tuesday from Monday's
four-month low, but hovered at 77 billion yuan, which is still
about 40 percent below the 2011 average, currently at 128.8
The benchmark Shanghai Composite Index shrugged off
midday losses to close up 1.4 percent at 2,743.5 points,
bouncing off the key 2,700 support in morning trade.
"This rebound is mainly technical, how much stocks go down
in the near term depends a lot on the bulk of the economic data
to be released in mid-June," said Wen Lijun, an analyst with
Expectations of a strong manufacturing data and a rising
market drove retail investors into beaten-down industrials.
Sany Heavy Industry Co Ltd gained 9.7 percent on
Tuesday, lifting the stock out of its technically oversold
status. It 14-day relative strength index (RSI) value had hit a
one-year low on Monday.
Long-only investors remain cautious, a Reuters poll showed,
with mutual funds reducing their recommended equity weightings
in May and doubling their weightings for bonds to the highest in
two years. [ID:nB9E7EK00I]
(Editing by Kim Coghill)