China, Hong Kong shares rise on buoyant global markets

* SSEC +0.2 pct, CSI300 +0.1 pct, HSI +0.3 pct

* New batch of SOE reforms expected in Q3

* Sunac shares surge to record high in Hong Kong

SHANGHAI/HONG KONG , July 20 (Reuters) – China’s blue-chip
index rose to fresh 18-month highs early on Thursday, buoyed by
solid corporate earnings and signs Beijing is stepping up
restructuring of the country’s bloated state sector.

Hong Kong shares were also firm, with the benchmark Hang
Seng index on track to rise for the ninth day, bolstered by
buoyant global equity markets.

China’s blue-chip CSI300 index rose 0.1 percent,
to 3,734.09 points by the lunch break, while the Shanghai
Composite Index gained 0.2 percent, to 3,236.58 points.

The tech-heavy start-up board ChiNext rebounded
more than 1 percent, partly inspired by a strong performance in
the U.S. technology sector, which surged past its dotcom era
peak on Wednesday. Still, ChiNext is down 2.4 percent so far
this week as investors sought security in blue chips.

Ma Wenyu, strategist at Shanxi Securities, forecast that
earnings of cyclical sectors such as mining and steel will
continue to improve as Beijing steps up “supply-side reforms” to
reduce redundant capacity, while “state-sector restructuring is
expected to provide additional market catalyst”.

Leading construction companies, including Guangxi Liugong
Machinery Co, XXMG Construction Machinery
and Zoomlion Heavy Industry have
forecast robust earnings growth in the first half, helped by
government infrastructure investment.

Performance at several major coal miners also improved in
the first half, thanks to government-led reform measures.

China will announce a new batch of “mixed-ownership reforms”
in state-owned enterprises (SOEs) in the third quarter, the
official Shanghai Securities News reported on Thursday.

Most sectors gained, with consumer and
technology shares among the best performers.


Hong Kong’s Hang Seng index added 0.3 percent, to
26,752.92 points, while the Hong Kong China Enterprises Index
was unchanged at 10,861.82.

Gains in energy and industrial shares
offset losses in consumer and raw material stocks

Oil and gas giant PetroChina Co Ltd, the biggest
energy stock by market value, rose 0.6 percent to its highest in
more than two weeks aided by a 2 percent jump in oil prices on

Industrial stock China Merchants Port Holdings,
which flagged a more than 50 percent rise in half-year expected
profit last week, was among the top advancers on the benchmark,
rising over 4 percent.

Tencent shares see-sawed after rising as much as 0.7 percent
to HK$300 earlier. The Chinese gaming and social media firm has
added about 11 percent so far since July 7 when it announced it
would launch its mega-hit smartphone game in Europe and the
United States this year.

Sunac China jumped as much as 16.2 percent to a
record high after a deal with Dalian Wanda Group was reworked to
sell assets to just Sunac after banks scrutinised their credit
risk by bringing in Guangzhou R&F

(Reporting by Samuel Shen and Rushil Dutta; Editing by
Jacqueline Wong)