Hong Kong shares rise 2 pct on mainland China market surge

The CSI 300 Index of the biggest companies traded in Shanghai and Shenzhen rose 4.98 percent or 157.02 points to end at 3,309.25 points.

The Shanghai Composite Index SHCOMP, -2.67% turned lower throughout the morning, losing 3.2% by midday. China’s government spent 1.5 trillion yuan trying to shore up its stock market since the rout began three months ago through August, according to Goldman Sachs Group Inc.

Price swings have been exacerbated by state investigations into market manipulation as well as the Federal Reserve’s interest-rate meeting this week.

The government’s apparent intervention highlights the problem that authorities have been facing in handling the stock market that continues to plunge, as the Shanghai Composite is currently 40% below its high of seven years from back on June 9. Asian stocks advanced, led by gains in Hong Kong, after China published plans to reform its state-run companies as it battles to meet economic-growth targets. Hong Kong’s Hang Seng fell 0.4 percent to 21,479.34.

A worth above one hundred signifies Shanghai shares are pricing at a premium to shares in the identical firm buying and selling in Hong Kong, and vice versa.

“The weaker-than-expected Chinese data may cause some nervousness for markets”, Vasu Menon, vice president of wealth management at Oversea-Chinese Banking Corp.in Singapore, said by phone. South Korea’s benchmark Kospi closed 0.1% higher at 1,976.49, while Taiwan’s weighted index rose 1.3% to 8,445.50. In a survey released on Friday, a majority of economists polled by The Wall Street Journal said the Fed won’t raise rates on Thursday. Near-zero U.S. interest rates have supported demand for developing-nation stocks, bonds and currencies.

Elsewhere in Asia, the Malaysian government announced it is spending 20bn ringgit on lifting shares and reducing taxes for manufacturers, which sent the Kuala Lumpur composite index up 0.6%.

Traders are refraining from aggressive trading before then, he added.

China’s cupboard, the State Council, on the weekend additionally introduced tips on reforming the nation’s remaining state-owned enterprises, which dominate key sectors of the financial system, together with pure assets, power and telecommunications – and are seen as a drag on the financial system as they make up nearly all of corporations listed on China’s inventory market, whereas personal corporations discover it more durable to listing.

August industrial output and investment data on Sunday pointed to further weakness in the economy, and concerns about growing capital inflows added to the disquiet.