HK shares gain for 4th day; China stocks at 13-mnth high

Hong Kong shares jumped 2.4 percent in a fourth straight winning session on Friday as investors, cheered by strong earnings reports from U.S. companies and reassuring data from China, flocked to banking and property stocks.

Shanghai stocks lagged, inching up to a 13-month closing high, bolstered by this week's solid economic data and a surge in aluminium shares on hopes producers will soon reach an agreement that will slash their energy costs.

BEST WEEKLY GAIN IN HK SINCE END-MAY

The benchmark Hang Seng Index closed up 443.79 points at 18,805.66, gaining 6.2 percent in its best weekly advance in seven weeks.

Turnover dropped to HK$66.2 billion ($8.5 billion) from HK$70.9 billion on Thursday. Average daily turnover, which has been on the decline since a year-high of around HK$80 billion in May, has been languishing at an average HK$57 billion so far in July.

"Falling turnover is calling for more caution on the market's direction. Even if the index can make its way up to 20,000 points in the near term, it can change direction momentarily," said Alex Tang, research director with Core Pacific-Yamaichi International.

The China Enterprises Index, which represents top locally listed mainland Chinese stocks, finished up 2.2 percent or 243.96 at 11,146.43.

Heavyweight HSBC (0005.HK) led the charge with a 2.2 percent gain after its U.S. peer JPMorgan trumped expectations with its quarterly earnings on Thursday.

"A number of companies have already issued profit warnings here, so earnings are likely to be mixed. Further upside seems relatively difficult once corporate results start pouring in. Investors would much rather put their money into the IPO market," said Ben Kwong, chief operating officer with KGI Asia.

Orient Overseas (International) (0316.HK) clawed back 49.6 percent after a programme trade in the final minute of trade on Thursday sent the stock plunging 32 percent. The stock rose to HK$34.40 after closing at a 2-½ month low of HK$23 in the previous session.

China WindPower Group (0182.HK) dropped 6.2 percent after saying it would sell 700 million new shares to major shareholder Gain Alpha in a top-up placement to raise HK$579 million ($74.71 million) to fund acquisitions and increase installed capacity.

Hisense Kelon Electrical Holdings (0921.HK) gained 23.6 percent to HK$1.73 after agreeing buy home electronics manufacturing and sales assets from parent Qingdao Hisense for 1.24 billion yuan ($181.5 million). Its Shenzhen-listed shares (000921.SZ) gained 0.3 percent. The deal will be settled by an issue of up to 362.05 million A shares at 3.42 yuan each. link.....