Hong Kong and Shanghai shares soar

Hong Kong shares rose on Thursday as gains in financials and energy companies helped lift the benchmark on the day on better volume, while shares in Lenovo rose after the company reported its best quarter in two years. The Hang Seng rose 0.6 percent but remains in the middle of a consolidation pattern as investors remain wary of making big bets after a strong start to the year stalled mid-January.
In China, the Shanghai Composite was little changed, pausing after its nearly 5 percent gain on the month, but property developers were on the back foot after Beijing set stricter rules to restrict speculative home buying. "In short term, the index has little room to fall or rise," said Zhang Gang, an senior analyst at Central Securities in Shanghai. The property sub-index in Shanghai dropped 1.7 percent after Beijing spelled out stricter rules to restrict purchases of multiple homes in China's capital, in a bid to rein in soaring property prices. China Vanke, the country largest developer by sales, fell 1.9 percent, while Poly Real Estate Group Co, was down 2.6 percent even though it said on Thursday its contracted sales rose 48.3 percent in January.
Inner Mongolia Baotou Steel Union was the biggest gainer on the Shanghai market, jumped by its 10 percent limit due to a rise in steel prices. Hong Kong's benchmark index rose as turnover came in above HK$70 billion for the first time in three days, an early sign that investors might be getting more optimistic on the market.
Monetary tightening in China and an exodus of fund flows from regional markets to developed markets such as the US and Japan has dented a rally in Hong Kong that had seen the Hang Seng gain 5.4 percent in the first three weeks of the year. It has fallen just under 5 percent since its January high and remains locked within a consolidation "triangle" pattern forming on the charts. Shares in HSBC rose 2.1 percent, the biggest boost to the broader market, on nearly twice their average 30-day volume on growing optimism over the company's earnings scheduled for February 28. Also higher was Lenovo Group, the world's No 4 PC brand which reported results echoing those of its larger US rival Dell Inc.
Lenovo shares rose 3.4 percent as lower component prices boosted margins and helped the company post a 25 percent jump in quarterly profit. ZTE, China's No 2 telecoms equipment maker, rose in Shenzhen and Hong Kong after it said it would take part in a bid for bankrupt Nortel Network's 4G network technology. The company's Hong Kong-listed shares were up 4.1 percent.