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Hong Kong stocks close 0.50% higher

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(Globalpost/GlobalPost)

Hong Kong shares rose 0.50 percent Thursday following a rally on Wall Street fuelled by hopes the US Federal Reserve will hold off reeling in its stimulus too soon.

The benchmark Hang Seng Index rose 101.53 points to 20,440.08 on turnover of HK$69.90 billion ($9.02 billion).

China Construction fell 0.4 percent at HK$5.39 while Agricultural Bank of China rose 0.6 percent at HK$3.16, far below its session high.

"The rally in bank shares has been encouraging, but it's difficult not to be suspicious about the sustainability of the rebound," China Galaxy International wrote in a note to clients.

Shares of mid-sized mainland lenders also failed to hold on to early gains. China Minsheng dropped 2.4 percent to HK$7.71 after surging 6.3 percent on Wednesday, its biggest one-day jump since January.

Chinese shares ended flat, having spent most of the day in positive territory, as concerns over the health of the domestic economy persisted despite easing worries liquidity squeeze.

The benchmark Shanghai Composite Index edged down 1.49 points to 1,950.01 on turnover of 84.3 billion yuan ($13.7 billion).

A liquidity squeeze triggered a near six percent fall in stocks earlier this week, but the central bank sought to soothe markets on Tuesday by saying it would support financial institutions.

"The market is gradually shifting its focus from the liquidity shortage in the banking system to outlook for the domestic economy and corporate earnings," Sinolink Securities analyst Tao Jinggang told AFP.

Media and entertainment shares led the declines. Beijing Gehua CATV Network slumped 5.26 percent to 6.13 yuan, while Chinese Universe Publishing and Media lost 4.03 percent to 16.42 yuan.

But banks rebounded after suffering heavy losses. Bank of China rose 2.71 percent to 2.65 yuan and China Merchants Bank climbed 2,44 percent to 10.92 yuan.

Property developers rose after the government announced late Wednesday plans to redevelop urban areas.

Gemdale gained 2.88 percent to 6.43 yuan and Poly Real Estate rose 0.21 percent to 9.33 yuan.

dan/pj

http://www.globalpost.com/dispatch/news/afp/130627/hong-kong-stocks-close-050-higher-0