China and Hong Kong shares climb, Mengniu up after Danone's deal

Yashili International Holdings

31/10/2014 04:53

* HSI +0.9 pct, H-shares +1.1 pct, CSI300 +1.1 
    * Hong Kong indexes head for best month since July 
    * Steel stocks up after China says to support railway 
industry 
    * Mengniu rises after Danone's investment in Yashili 
 
    HONG KONG, Oct 31 (Reuters) - Shares in Hong Kong and 
mainland China markets rose on Friday, helped by strength in 
most heavyweight stocks as investors bet that China's government 
will roll out more support measures for the economy. 
    The Shanghai Composite Index  .SSEC  rose 0.9 percent to a 
20-month high of 2,412.5 points by midday, while the CSI300 
 .CSI300  of the leading Shanghai and Shenzhen A-share listings 
climbed 1.1 percent. 
    For the week, the mainland indexes looked set to gain 4.8 
percent and 4.4 percent, respectively. For the month, the 
indexes were up 2.1 percent and 1.8 percent, respectively.  
    "Gains by heavyweight stocks helped the main index to climb 
above 2,400 points - a technically-important level," said Tian 
Weidong, head of research in Kaiyuan Securities in Xi'an. 
    "The logic behind their gains is that they are betting on 
more easing policy from the government to come in the medium to 
long-term." 
    Financials sectors provided strong support to main indexes, 
with Bank of China Ltd  601988.SS  rising 3.7 percent, 
Industrial and Commercial Bank of China Ltd  601398.SS  climbing 
2.2 percent, and China Life Insurance Co Ltd  601628.SS  gaining 
2.1 percent.  
    Steel-related stocks also rose after China announced 
recently it would further support the railway industry. 
    Wuhan Iron and Steel Co Ltd  600005.SS  rose 6.0 percent, 
Baoshan Iron&Steel Co Ltd  600019.SS  rising 3.4 percent, and 
Maanshan Iron & Steel Co Ltd  600808.SS  surging 7.6 percent. 
    In Hong Kong, the Hang Seng Index  .HSI  gained 0.9 percent 
to 23,916.54 points by the lunch break on Friday. The China 
Enterprises Index  .HSCE  of the top Chinese listings in Hong 
Kong rose 1.1 percent. 
    Both indexes were up more than 4 percent so far in October, 
heading for their best months since July. 
    "The sentiment is back, the market is following the U.S 
market as Fed stopped QE (quantitative easing) and its economy 
and employment rate are picking up," said Sam Chi Yung, 
strategist at Delta Asia Financial Group in Hong Kong.   
    Analysts said people also were investing in safer shares in 
sectors such as utilities. China Resources Power Holdings 
 0836.HK  rose 2.5 percent. 
    The casino shares extended gains after Wynn Resorts Ltd 
 WYNN.O  posted better-than-expected quarterly earnings. By 
midday, Wynn Macau Ltd  1128.HK  was up 0.5 percent. Rivals 
Galaxy  0027.HK  rose 3.8 percent, SJM Holdings  0880.HK  was up 
2.8 percent and Sands China  1928.HK  climbed 2.5 percent. 
    The consumer goods sector was lifted by Mengniu Dairy 
 2319.HK  after Danone SA  DANO.PA  announced that it would buy 
a 25 percent stake in Mengniu's controlled Yashili International 
Holdings Ltd  1230.HK  for $550 million.  ID:nL4N0SQ0EM  
    Mengniu shares climbed 1.9 percent to their highest in 5 
weeks. China Modern Dairy Holdings  1117.HK  rose 1.8 percent. 
Yashili shares reversed early gain and were down 6.9 percent. 
 
 (Reporting by Shanghai Newroom; Editing by Kim Coghill) 
 ((donny.kwok@thomsonreuters.com; +852 2843 6470; Reuters 
Messaging: donny.kwok.reuters.com@reuters.net)) 
 
Keywords: MARKETS CHINA STOCKS/MIDDAY