Hong Kong blue chips ended up 0.8 percent on Wednesday, led by China Mobile, while recently battered commodity stocks found a toehold, reversing a six-session losing streak in the resource heavy H-share index.
Investors intensified their focus on the initial public offering market ahead of a spate of new listings in the coming weeks, bidding up peers of listing candidates.
The benchmark Hang Seng index gained 134.64 points to close at 17,210.04 on turnover of HK$25.0 billion (US $3.2 billion), down slightly from Tuesday's HK$27.0 billion. "Traders are trying to create a good environment for the new IPOs," said Steve Cheng, associate director at Shenyin Wanguo.
With the IPO market drawing much attention, "the secondary market is a bit quiet.Investors are chasing the shadow stocks," he said, referring to those shares similar to the listing hopefuls. Bank of Communications outperformed other mainland banking shares, rising 0.8 percent to HK$5.02.
China's fifth-largest lender is seen as a close peer of China Merchants Bank, the nation's sixth-largest lender, which is raising up to US $2.4 billion in a Hong Kong share sale.
Sinochem Hong Kong Holdings Ltd, China's largest fertiliser company, jumped nearly 3 percent to HK$2.95 as fertiliser maker China Blue Chemical Ltd, sister company of top Chinese offshore oil firm CNOOC Ltd began marketing its Hong Kong IPO on Monday in what could be a share sale worth up to HK$2.7 billion.
Beijing retail chain Wumart Stores Inc shot up 9.2 percent to HK$26 after rival Beijing Jingkelong opened its books for retail subscription on Tuesday.
"Over the last few days, oil and commodities have come down too sharply," said Steven Leung, sales director at UOB Kay Hian Holdings. "We'll see more upside in these stocks."
Basic materials stocks helped boost the resource-heavy China Enterprises index of mainland H shares up 0.6 percent. Oil producer PetroChina Co Ltd closed up 0.6 percent at HK$8.29 and gold miner Zijin Mining Co Ltd edged up 0.8 percent to HK$3.69. The world's largest cellular operator, China Mobile, was the biggest boost to the blue chips, gaining 1.2 percent to HK$52.25. The city's top lender, HSBC Holdings Plc, rose 0.7 percent to HK$139.80.
PC maker Lenovo Group Ltd surged 3.5 percent to HK$2.95 in heavy trade, tracking gains in tech shares on Wall Street. In a research note dated September 13, HSBC said it was initiating coverage of Lenovo with an "overweight" rating with a target price of HK$4.6. Macau casino operator Galaxy Entertainment slid 1.4 percent to HK$6.95 after reporting a loss of HK$734 million for the first-half, versus a profit of HK$14 million a year ago.
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