Hong Kong stocks ended up 0.33 percent on Wednesday, ending a four-day losing
streak, led by gains in market heavyweights China Mobile and HSBC Holdings Plc.
Mainland insurers also climbed, with China Life Insurance Co. Ltd. rising 2.5
percent to HK$12.55 after the country's top life insurer posted a 22 percent
rise in first-half premiums from a year earlier.
The benchmark Hang Seng index added 53.60 points to finish at 16,097.54.
Turnover totalled HK$19.6 billion (US$2.5 billion), down from HK$21.4 billion on
Tuesday.
Despite the gains, any sustained uptrend in the near term was unlikely as
fund managers had turned increasingly cautious, analysts said.
"The market is sticky -- it's difficult for it to go anywhere," said Dale
Tsang, managing director at GC Capital (Asia) Ltd, citing geopolitical risks and
an uncertain interest rate outlook in the United States and China.
"People are adjusting their portfolios. They're just not comfortable with
what's going on."
Investors hope to get a clearer direction on U.S. interest rates when Federal
Reserve chairman Ben Bernanke delivers his semi-annual monetary report to
Congress later in the day.
"The interest rate-inflation balancing act isn't going away," said Matt
McKeith, Head of Equity Dealing at First State Investments. "It's the macro
picture that is going to drive the market direction ... You've got strong China
GDP growth figures -- are there going to be more tightening measures? They
didn't work before. (Is China) going to be more aggressive?"
According to Merrill Lynch's July Pacific Rim Fund Manager survey, a net 40
percent of respondents believed the Asian profit outlook would deteriorate over
the next year, the lowest level since the bank began the survey in 1997.
The bank found that the region's fund managers were showing "less conviction
as each month passes", tempering growth and earnings expectations along the way.
Index heavyweights staged a rebound, with HSBC edging up 0.5 percent to
HK$135.50 and China Mobile, the biggest boost to the Hang Seng index, jumping
1.3 percent to HK$44.70.
Insurers gained after mainland media reported total insurance premiums in
China rose 13 percent in the first half. Insurance companies which invest in
interest-bearing instruments like bonds also benefited from speculation that
there would be further interest rate rises in China.
Ping An Insurance surged 4.6 percent to HK$23.70.
Mainland carrier China Eastern Airlines Corp. Ltd climbed 2 percent to
HK$1.03. It is seeking to sell a stake to Singapore Airlines, sources at China
Eastern said on Wednesday.
