Hong Kong, Shanghai stocks up

Shanghai and Hong Kong stocks edged higher on Thursday led by Chinese banks, while property shares slid ahead of year-end. China's stock market ended up 0.29 percent in thin trading, buoyed by late afternoon rebounds in banking stocks as some investors took advantage of their battered valuations, but property developers and car makers continued to sink on policy concerns.
The Shanghai Composite Index ended at 2,759.58 points, reversing an earlier loss as fears over monetary tightening eased during the last few days of trading in 2010. "The market has calmed as many traders chose to stay on the sidelines toward the year-end," said Cao Xuefeng, analyst at Huaxi Securities Co "Willingness both to buy and sell has waned," he said.
After a nearly 4 percent drop during the first two days of the week triggered by Beijing's weekend interest rate rise, the market has entered a see-sawing pattern as stock valuations driven down by panic selling attracted bargain-hunting.
Banks, which had been the main drag on the market this week because of the sector's vulnerability to policy tightening, rebounded sharply in afternoon trading, with China's biggest lender Industrial and Commercial Bank of China Ltd jumping 3.2 percent. SAIC Motor Corp Ltd, China's top automaker, dropped 2.4 percent, while smaller rival Tianjin FAW Xiali Automobile Co Ltd lost 1.8 percent.
However, Hong Kong-listed auto counters extended gains from the previous session. Brilliance China Automotive Holdings Ltd, which rose 4.8 percent on Wednesday, surged 7.2 percent. Guangzhou Automobile Group Co Ltd rose 2.8 percent and Dongfeng Motor Group Co Ltd gained 1.4 percent. Most wineries and brewers rose on optimism the coming holiday season would boost sales of alcohol. Yantai Changyu Pioneer Wine Co Ltd rose 1.4 percent.
In Hong Kong, the benchmark Hang Seng Index edged up 0.13 percent for a second consecutive session of gain to end at 22,999.34, its highest close in more than a week. Industrial and Commercial Bank of China Ltd climbed 1.2 percent, and China Construction Bank Corp gained 0.7 percent. PetroChina Co Ltd gained 0.7 percent as oil prices rose further on Thursday. China Rare Earth Holdings Ltd surged 6.9 percent to its highest in more than six weeks, before ending at HK$3.76, up 4.4 percent. The stock jumped 16 percent on Wednesday after China cut export quota.