HONG KONG: Hong Kong stocks enjoyed robust gains Wednesday morning after data showing an improvement in the Chinese services sector, with the Hang Seng Index HSI, +0.74% up 1% after a 0.5% drop the previous day. The shares extended gains after HSBC reported that its Chinese services PMI gauge improved to 53.5 in May from 52.9 in April. Tencent Holdings Ltd. 0700, +0.70% TCEHY, +1.15% and China Mobile Ltd. 0941, +1.26% CHL, +1.01% among the heaviest weighted shares on the benchmark index, added 1% each. Airlines were also a strong spot, with China Eastern Airlines Corp. 0670, +0.50% CHEAF, +4.17% 600115, -2.50% up 1.3%, China Southern Airlines Co. 1055, +2.35% ZNH, -2.06% 600029, -1.25% — which was recently added to MSCI’s China index — surging 4.8%, and Air China Ltd. 0753, -0.42% AIRYY, +1.83% 601111, -2.92% up 1.8% as a McClatchy Tribune report said the carrier had expanded a codeshare partnership with Chicago-based United Airlines. On the downside, mainland Chinese banks recorded substantial losses after China’s central bank unveiled detailed regulations on the issuance of large-denomination certificates of deposite, a move widely seen as a challenge to banks’ existing investment products. Industrial & Commercial Bank of China Ltd. 1398, -1.47% IDCBF, +4.68% 601398, -0.77% and China Construction Bank Corp. 0939, -0.64% CICHF, +1.99% 601939, -1.35% declined 1.3% each, China Merchants Bank Co. 3968, -0.81% CIHHF, -1.38% 600036, +0.26% sagged 1.2%, and Bank of Communications Co. 3328, -0.92% BKFCF, +0.52% 601328, -3.22% lost 0.9%. Meanwhile, Cheung Kong Property Holdings Ltd. 1113, +0.00% — the new property company of Hong Kong tycoon Li Ka-shing — jumped 3.9% on its first day of trading in Hong Kong after Li reorganized his empire and spun off the real-estate assets from his main conglomerate. On the mainland, the Shanghai Composite Index SHCOMP, -1.02% rose 0.4%, reversing a loss earlier in the session.
