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Hong Kong stocks close 2.43% higher

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(Globalpost/GlobalPost)

Hong Kong shares finished 2.43 percent higher on Wednesday as traders welcomed a move by China's central bank to ease a liquidity crisis that has hit the country's financial markets.

The benchmark Hang Seng Index rose 482.83 points to 20,338.55 on turnover of HK$78.84 billion ($10.17 billion).

Global markets tumbled this week as China's lenders have been hit by a credit squeeze that fuelled concerns for its wider economy.

But traders breathed a sigh of relief after the People's Bank of China (PBoC) late Tuesday said it had made money available to some firms in a bid to prevent a cash crunch that had sent shares into a tailspin.

The announcement came just a day after it said it was ruling out providing fresh cash and ordered banks to put their financial houses in order.

Hong Kong-listed China bank shares rebounded after a recent heavy sell-off, while shares were also boosted by a rally in US stocks.

Mid-sized mainland lender China Minsheng rose 6.4 percent to HK$7.90 after the bank's management assured investors about the strength of its liquidity position.

The bank's shares are "not for the faint of heart, but we see reward outweighing risk at this level", investment banking firm Jefferies said in a note to clients.

Meanwhile shares in the Industrial and Commercial Bank of China (ICBC) in Hong Kong jumped 6.8 percent to HK$4.70 and China Construction Bank rose 6.5 percent to HK$5.41.

"Hong Kong is always this difficult place, sandwiched between China and the U.S.," said Jiong Shao, China strategist for Macquarie Securities.

Chinese shares closed down 0.41 percent as traders remain nervous.

The benchmark Shanghai Composite Index fell 8.01 points to 1,951.50 on turnover of 80.9 billion yuan ($13.2 billion), marking the lowest close since January 15, 2009.

"Investors are worried about financial risks if more problems pop up in the banking system," Capital Securities analyst Jacky Zhang told Dow Jones Newswires.

Banking stocks were mixed. Bank of Communication dropped 1.72 percent to 3.99 yuan and China Minsheng Bank fell 1.66 percent to 8.30 yuan. But ICBC rose 0.54 percent to 3.74 yuan.

China Shenhua Energy lost 3.03 percent to 16.99 yuan, China Coal Energy dropped 2.37 percent to 4.94 yuan and Yanzhou Coal Mining fell 1.86 percent to 9.51 yuan.

-- Dow Jones Newswires contributed to this report --

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http://www.globalpost.com/dispatch/news/afp/130626/hong-kong-stocks-close-243-higher-0