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Hong Kong stocks rise to 3-week high on commodities; China flat
January 5, 2017 / 5:02 AM / 9 months ago

Hong Kong stocks rise to 3-week high on commodities; China flat

* SSEC +0.1 pct, CSI300 flat, HSI +1.3 pct

* Caixin services PMI rises to 17-month high in December

* Energy majors rally on oil and coal strength

SHANGHAI, Jan 5 (Reuters) - Hong Kong stocks climbed to a three-week high on Thursday morning, buoyed by strength on Wall Street, improving private sector activity and strong resource shares.

China stocks were flat and trading was thin, with investor attention largely diverted to the strong and dramatic rebound in the offshore yuan currency.

The Hang Seng index added 1.3 percent, to 22,422.76 points. The benchmark is poised to rise the most in six weeks if the market maintains gains in the afternoon session. The Hong Kong China Enterprises Index rose 1.6 percent, to 9,590.04 points.

The market drew some inspiration from continued strength in U.S. equities, amid sustained optimism that President-elect Donald Trump’s fiscal stimulus promises would translate into faster U.S. economic growth.

Minutes from the Federal Reserve’s December meeting showed that almost all Fed policymakers thought the economy could grow more quickly on Trump hopes and many were eyeing faster interest rate increases.

The market also drew some support from improved conditions in Hong Kong’s private sector as reflected by the Nikkei Purchasing Managers’ Index (PMI), which in December recorded the first expansion in 22 months.

The Hong Kong survey followed encouraging manufacturing data earlier in the week from China and the United States which offered fresh signs of global economic recovery.

Nearly all sectors in Hong Kong advanced by the lunch break, with the biggest gain seen in the energy sector, which jumped 3 percent.

Index heavyweight PetroChina Co Ltd jumped nearly 4.2 percent by midday, as oil managed to hold on to Wednesday’s chunky gains.

CHINA STOCKS

In China, the CSI300 index was unchanged at 3,367.19 points, while the Shanghai Composite Index gained 0.1 percent, to 3,162.37 points.

Investors’ responses were muted towards a private survey showing that growth in China’s services sector accelerated to a 17-month high in December.

Much attention was on the Chinese currency, which rebounded sharply against the U.S. dollar in the offshore market overnight, as Beijing intervened, sparking speculation that it wants a firm grip on the currency ahead Trump’s inauguration later this month.

Sector performance in China was mixed, with strength in energy countered by weakness in infrastructure stocks.

The consumer staples sector dipped around 0.5 percent after a four-day winning streak as investors locked in profits.

An index tracking transportation stocks edged lower after China said it would not increase its railway construction budget in 2017.

Reporting by Jackie Cai and John Ruwitch; Editing by Jacqueline Wong

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