Barefoot Investor: Hong Kong News Recap: HK shares end up 2.1 pct, biggest one-day gain in two months

Hong Kong shares gained on Friday, as global debt concerns appeared to ebb, giving investors a chance to focus on low valuations ahead of results from China Inc even as average turnover suggested a lack of conviction.

The Hang Seng Index closed up 2.1 percent on the day and 2.6 percent on the week at 22,444.8 points, while the China Enterprises Index closed up 2.2 percent on the day and 2.7 percent on the week at 12,598.8 points.

The Shanghai Composite Index snapped a four-day losing streak to edge up 0.2 percent on the day to 2,770.8 points. But it was not enough to prevent the benchmark from its first weekly loss in five as it finished down 1.8 percent.


* Shares of companies with large European businesses jumped. HSBC Holdings Ltd , Europe's largest bank and the largest single weight on the benchmark Hang Seng Index, was its biggest support with its largest one-day gain in six months.

* Fashion retailer Espirit Holdings gained more than 5 percent, its biggest intra-day gain since Valentine's Day this year. Espirit hit its 2011 high to date back then, but has since slid more than 43 percent from that peak. Espirit, for whom sales in Europe accounted for 79.1 percent of its total turnover for the nine-month period ending in March, had hit a seven-year low on Tuesday, before bouncing back up.

* A choppy market over the past two months has punished investors who follow near-term market trends while longer-term players have gravitated toward defensive low-beta names. With the markets showing signs of a short-term bounce traders said momentum followers, desperate to recover some of their losses from the previous quarter, were buying into counters with high beta values, or those more likely to outperform the benchmark, to get in front of a wider shift back to these names.

* China Cosco , with a beta of 2.3, which means the stock is likely to move twice as much as it underlying benchmark, rose 5.8 percent in more than twice its 30-day average volume. China National Building Materials , whose rally stalled in early July, rose nearly 4 percent.


* Power Assets Holdings Ltd is expected to announce its first half earnings results on Wednesday with Cheung Kong Infrastructure Holdings Ltd due on Thursday. (Reuters)


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