Hong Kong shares up

Hong Kong shares rose on Tuesday, snapping a four-day losing streak on a short squeeze in the Chinese property sector after several leading developers reported better sales in March. Local media reported that contracted sales for Evergrande grew 1.4 times in March from February, helping further dissipate gloom in the sector after 2011 corporate earnings were not as bad as some had feared.
Embattled Hong Kong property giant Sun Hung Kai Properties produced its first rise in five days, with gains accelerating after the company announced the owners would make their first public appearance later in the day. The Hang Seng gained 1.3 percent, while the China Enterprises Index of the top mainland listings in Hong Kong jumped 1.8 percent. Market turnover on Tuesday was relatively weak, but increased 40 percent from Monday.
Chinese internet giant Tencent Holdings was among the Hang Seng Index's top boosts, gaining 2.9 percent after Goldman Sachs became the latest brokerage to upgrade the stock from neutral to buy. Mainland Chinese markets are shut for a three-day holiday and will resume trading on Thursday, while markets in Hong Kong will be shut on Wednesday and Friday. Traders said overall bourse turnover was likely crimped as a result.
"Positive March contract sales numbers are a short-term positive for the stock prices of Chinese developers because it means their cash flows were better," said Alan Lam, Julius Baer's Greater China equity analyst. Evergrande, China's fifth-largest developer by sales according to the China Real Estate Information Corp (CRIC), on Tuesday surged 7.5 percent in almost double its 30-day average, bringing its gains this year to 42 percent.
This compares with the 13 and 9.3 percent gains on the Hang Seng and China Enterprises indices, respectively, this year. In 2011, Evergrande lost 15 percent, while the two benchmarks lost 20 and 22 percent respectively. Shares of Chinese railway companies extended gains after posting strong 2011 earnings over the weekend. China Rail Construction jumped 8.4 percent on Tuesday, bringing its gains this week to 18 percent. Sun Hung Kai's 2 percent gain on Tuesday recovered about one-fifth of the $5.5 billion it lost in market value after news of the arrest of its co-chairmen by Hong Kong's corruption watchdog last week.