Hong Kong shares have gained 0.
18 per cent, a fifth consecutive rise, following a record close on Wall Street and after China unveiled a mini stimulus to kickstart the world’s No.2 economy.
The benchmark Hang Seng Index on Thursday added 41.14 points to 22,565.08 on turnover of $HK71.67 billion ($A10.03 billion).
Beijing on Wednesday unveiled a mini stimulus program to boost the Chinese economy, which has shown signs of slowing in recent months. Among the measures are extra spending on railways, improving low-income housing and tax relief for small businesses.
On Wall Street, the S&P 500 closed up 0.29 per cent at a second straight record high after payrolls firm ADP said US businesses added 191,000 jobs in March, returning to the level of growth seen in December before severe winter weather hit the country.
The Dow added 0.24 per cent and the Nasdaq finished 0.20 per cent higher.
In Hong Kong shares, energy giant CNOOC rose 1.03 per cent to $HK11.82, HSBC was 0.13 per cent higher at $HK79.05 and Henderson Land Development eased 0.53 per cent to $HK46.70.
Rail stocks rallied sharply after Beijing’s pledge to increase railway spending with China Railway Construction rising 7.2 per cent to $HK7.43 and China Railway Group gaining 5.1 per cent to $HK3.92.
However, analysts warned that rail was a long-planned target for Chinese stimulus and the new measures will not necessarily have a lasting impact on company earnings.
China “has always been inclined to use the railway as a measure to boost economic growth”, Jefferies financial group said in a note to clients. “It only creates peak earnings for the rail builders and train makers that are difficult to sustain.”
On the mainland, the benchmark Shanghai Composite Index fell 0.74 per cent, or 15.29 points, to 2,043.70 on turnover of 79.5 billion yuan ($A13.88 billion).
Investors were disappointed at the fact there was no mention of monetary policy, such as a reduction in the amount of cash banks must keep in reserve, or an interest rate cut.
The Shenzhen Composite Index, which tracks stocks on China’s second exchange, edged up 0.04 per cent, or 0.46 points, to 1,055.58 on turnover of 85.5 billion yuan.
“The stimulus program is largely in line with expectations. It’s clear that the central authorities have refrained from aggressive investment,” Zhang Gang, an analyst at Central China Securities, told Dow Jones Newswires.
“Without large-scale spending, cyclic stocks will remain sluggish.”
Property developers fell despite the pledge to upgrade old urban housing. Beijing Vantone Real Estate tumbled 9.18 per cent to 3.66 yuan and Poly Real Estate fell 1.58 per cent to 8.11 yuan.
And steel and coal makers fell on concerns about the economy. Baoshan Iron & Steel dropped 2.3 per cent to 3.88 yuan and Hebei Iron and Steel lost 4.0 per cent to 1.90 yuan.
However railway-related stocks rose on the promise for more rail construction, as in Hong Kong.
Jinxi Axle gained 2.78 per cent to 13.69 yuan and China Railway Construction rose 0.69 per cent to 4.37 yuan.