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Hong Kong stocks close up 1.6 percent

Published 04/20/2011, 04:19 AM
Updated 04/20/2011, 04:24 AM
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HONG KONG, April 20 (Reuters) - Hong Kong shares rebounded on Wednesday, snapping a three-day losing streak as investors, encouraged by corporate earnings in the United States, chased laggards, with energy issues outperforming the broader market.

The benchmark Hang Seng Index closed up 1.6 percent at 23,896.1, underperforming the energy sub-index , which gained 2.3 percent. The China Enterprises Index traded up 1.85 percent to 13,492.38 on the day.

China's benchmark Shanghai Composite Index gained 0.27 percent to 3,007.04 points, after shedding 1.9 percent on Tuesday in its biggest percentage fall in nearly 2 months.

HIGHLIGHTS

* Turnover remained low, hitting HK$72.5 billion, but increased marginally for the first time in three sessions.

* Tencent Holdings Ltd led gains on the benchmark, closing up 7.1 percent in volume two times its 30-day average, tracking Chinese rival, Nasdaq-listed Sina Corp's all-time high on Tuesday, as bullishness on China's internet sector spilled over after the country's largest social network, Renren, filed for a U.S. initial public offering to raise up to $573.1 million.

* Before Wednesday's jump, Tencent had fallen more than 10 percent from its 2011 peak in early March, pushing its valuation below historic levels. According to Thomson Reuters Starmine, Tencent shares trade at a 10 percent discount to their median forward 12-month price-to-earnings multiple.

* The Hang Seng energy sub-index outperformed the benchmark Hang Seng Index . Analysts said they saw bargain-hunting after the market underperformed in the last few sessions, with funds chasing stocks that have been lagging, especially sectors seen favoured by the Chinese government.

* Macau casino operators Galaxy Entertainment Group Ltd and Wynn Macau Ltd , a unit of casino magnate Steve Wynn's Wynn Resorts Ltd , jumped on Wednesday after strong earnings results showed unflagging growth in the world's largest gaming market. Wynn Macau was up 1.1 percent after posting a 47 percent rise for revenue in the first three months of the year. Galaxy Entertainment, about 20 percent owned by European private equity firm Permira , traded up 6 percent after posting a 71 percent rise in first-quarter EBIDTA.[ID: nL3E7FK0E6]

DAY AHEAD:

* Aluminum Corp of China Ltd (CHALCO) is due to announce its Q1 results on Thursday. (Reporting by Clement Tan; Editing by Chris Lewis)

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