Hong Kong - Chinese stocks in Hong Kong headed toward an almost two-year high as rail and financial shares rallied. A measure of large caps climbed in mainland trading.
The Hang Seng China Enterprises Index rose 0.9% at the midday break. China Railway Construction was poised for its biggest gain since March, while New China Life Insurance advanced for a fifth day. Future Land Development surged 13% after unveiling a $656m take-private offer in Hong Kong.
The CSI 300 Index of mainland-traded large-cap stocks gained 1.1% to head toward the highest close since 2015, with materials companies in the lead.
Offshore-traded Chinese companies have outperformed mainland shares this year by a wide margin, as funds flowed into Hong Kong through mainland stock links, while global investors piled into technology companies as markets rose to multi-year highs.
Meanwhile, mainland shares have been dragged down by concerns over China’s deleveraging campaign and the health of smaller, non-state firms. The Shanghai Composite Index is up just 3.5% this year, compared with a 15% advance for the H-share measure. Mainland large caps have fared better, with the CSI 300 Index climbing 12% this year.
“Sentiment has been good for mainland large caps ahead of earnings announcement,” said Daniel So, a strategist with CMB International Securities in Hong Kong. Infrastructure and railway companies are playing catch up as they have been lagging the overall market, he said.
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