HK, China shares up; HSBC recovers, Esprit gains

By Donny Kwok and Claire Zhang

HONG KONG/SHANGHAI, March 3 (Reuters) - Hong Kong stocks edged higher on Wednesday, as index heavyweight HSBC recovered from the previous session's sharp drop, while investor hopes for support measures from China's parliamentary meeting boosted mainland stocks, particularly renewable energy counters.

HSBC Holdings had rebounded with a 1.18 percent gain to HK$81.50 by the lunch break after ending down 7.04 percent in the previous session following disappointing results.

'Though the rebound could extend, HSBC's unexciting earnings outlook had made it unattractive to investors, while Standard Chartered appeared to be a safer bet in the short run,' said Andrew To, a sales director at Tai Fook Securities.

Standard Chartered rose 2.5 percent to HK$184.40 at midday ahead of the release of its 2009 results. The Asia-focused bank is expected to report a pre-tax profit of $5.1 billion, up 6 percent on the year.

Appetite for Chinese financial shares, fuelled by hopes that China's loose monetary policy will stay in place, aided the sentiment, sending top lender ICBC up 0.85 percent.

Brokers said investors were also awaiting clues from China's annual parliamentary meeting on measures to cool the red-hot property market.

The benchmark Hang Seng Index had trimmed its earlier advance to a 0.03 percent gain, or up 5.86 points, to 20,911.97 at midday. The China Enterprises Index of top locally listed mainland Chinese stocks remained firm and rose to about a six-week high at 12,081.68 before steadying at 12,045.96 at midday, up 0.24 percent.

Turnover fell to HK$33.2 billion ($4.3 billion) from midday Tuesday's HK$40.59 billion.

Europe-focused fashion retailer Esprit rose 3.02 percent to a two-week high of HK$58 as the euro rebounded from a 9-½ month low against the U.S. dollar ahead of a possible Greek debt plan.. The stocks were up 1.8 percent at midday.

MTR Corp rose 2.8 percent to a four-month high of HK$28 after the railway operator said a consortium comprising Wheelock Properties Ltd and New World Development had won a tender for a property development in Hong Kong, of which MTR would contribute one-third of the land costs.



SHANGHAI UP ON RENEWABLE ENERGY STOCKS

China's key stock index rose 0.35 percent on Wednesday, with renewable energy shares strong as investors sought clues on policy support measures from this week's start of China's annual parliamentary meeting.

The Shanghai Composite Index ended the morning at 3,083.783 points, retracing some of its modest loss the day before after a week-long rally fuelled by speculation in small-cap shares stalled at a five-week high.

Investors will be watching closely for policy signals from the annual meeting of the National People's Congress, China's parliament, which begins this week.

'The index is expected to be stable during the meeting of China's parliament as negative news should be limited, while green energy will be a hot topic during the session,' said Wen Lijun, analyst at Nanjing Securities.

Analysts said investors were wary, however, about possible policy moves to curb price rises in the property sector, although shares of sector heavyweight China Vanke were only marginally weaker on Wednesday, down 0.21 percent at 9.59 yuan, after the company's fourth-quarter net profit beat expectations and it forecast strong sales growth this year.

Nanjing Securities' Wen added that the index could test its 60-day moving average, now at 3,136 points, in the short term.

Several analysts also expected the benchmark index to move narrowly around the 125-day moving average, now at 3,078 points, for the rest of this week. The average is regarded as a barometer of bearish versus bullish sentiment in the market.

Gaining Shanghai stocks outnumbered losers by 597 to 271, while turnover fell to a moderate 67 billion yuan ($9.8 billion) from Tuesday's 70 billion yuan.

Renewable energy shares outperformed, with Shenzhen Topraysolar, a maker of solar power cells, gaining 5.96 percent to 26.50 yuan and power transmission equipment maker Baoding Tianwei Baobian Electric climbing 5.86 percent to 31.77 yuan

(Editing by Ken Wills)

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