Commodity firms, vehicle makers up on improving fundamentals
China stocks inch up on hopes for Q3 earning season; Hong Kong flat
12 Sep 2017 - 9:13
SHANGHAI: China stocks edged up on Tuesday, as investors expect listed firms, especially commodity producers, to post solid results in the third quarter.
Hong Kong shares hovered close to over two-year-highs, as global risk appetites improved after the North Korea tension eased and Hurricane Irma was downgraded to a tropical depression.
China's blue-chip CSI300 index rose 0.2 percent, to 3,832.39 points by the lunch break, while the Shanghai Composite Index gained 0.1 percent, to 3,378.78 points.
Nearly 1,000 China-listed companies have put out preliminary reports forecasting a rise in third-quarter profits, China Securities Journal said. The media report stirred expectations of another encouraging earnings season ahead.
Zhou Yu, strategist at Pacific Securities, said he expects upstream sectors including steel, coal, non-ferrous metal and petrol could continue to attract buying interest in light of steady gains in profitability.
"With improving expectations, on-going supply-side reforms, and toughening environmental inspections, the cyclical sector would continue to witness improving returns on equity (ROE) in the third quarter," he wrote in a strategy report.
Resources shares rose sharply on Tuesday, as steel and aluminum futures advanced in Shanghai amid signs of tighter supply.
Baoshan Iron & Steel raised the prices of its main products for October delivery, underlining improving margins for steelmakers.
Meanwhile, Aluminum Corp of China Ltd (Chalco) halted trading in its China-listed A-shares, spurring expectations it could become the latest target of state-owned enterprise (SOE) restructuring that potentially improves corporate fundamentals. Chalco's Hong Kong-listed shares surged over 7 percent.
China's automakers were also strong on news that the country's vehicle sales rose for the third consecutive month in August.
An index tracking new energy vehicles (NEVs) continued to surge, after the government said over the weekend it was mulling a ban in future on sales of traditional gasoline-powered vehicles.
Hong Kong stocks were calm, as Asian shares hit a 10-year peak on Tuesday after U.S. S&P 500 Index surged over 1 percent to a record high overnight on the back of receding geographical tensions.
The Hang Seng index was unchanged at 27,952.99 points, while the Hong Kong China Enterprises Index lost 0.1 percent, to 11,213.86.