Monday, 26 May 2014 12:04
HONG KONG: China shares rose on Monday, helped by gains for car makers after President Xi Jinping said developing energy-efficient vehicles is the only way to strengthen the country's auto industry.
Investors in the Chinese onshore markets were also cheered by Premier Li Keqiang's remarks, reported by state media late Friday, that timely policy fine-tuning is needed to underpin growth in the world's second-largest economy.
Hong Kong shares were flat after a choppy morning session, dragged down by a weaker energy sector. At midday, the Hang Seng Index was down 0.1 percent at 22,950.39 points.
The China Enterprises Index of the top Chinese listings in Hong Kong fell 0.3 percent. The CSI300 of the leading Shanghai and Shenzhen A-share listings and the Shanghai Composite Index each gained 0.4 percent. Shanghai's benchmark index ended at 2,041.94 points.
"Premier Li's comment may help the market sentiment to stabilise," said Castor Pang, head of research at Core Pacific-Yamaichi in Hong Kong. Pang added that the Hong Kong markets may rise in the near term depending on how good a load of coming US economic data turns out.
So far, Hong Kong's benchmark index has climbed 3.7 percent in May.
Warren Buffett-backed Chinese carmaker BYD Co Ltd was in focus on Monday after the company launched a new share issue seeking to raise up to $550 million.
Its Hong Kong shares tumbled almost 9 percent when the market opened but recovered most of the losses and ended the morning session down 1.9 percent, helped by Xi's remarks on green cars. Its Shenzhen shares soared 8.8 percent, the top gainer of CSI300. Leading H-share gainers were Great Wall Motor, which climbed 3.0 percent and Guangzhou Automobile Group, up 1.7 percent.
But the advances in Hong Kong were outweighed by weakness in energy counters.
PetroChina, the biggest drag on both indexes, lost 1.1 percent as investors took profit after the stock hit six-month highs last week.
The aviation sector was another outperformer in China, with AVIC Aircraft up 4.4 percent in Shenzhen following Xi's comment that China should make its own large aircraft.Copyright Reuters, 2014