Hong Kong stocks pounded higher Wendesday morning despite data showing China's economic growth eased to 7% year-on-year in the first quarter, the slowest rate in six years, as investors expected more easing measures from the Chinese government to fight the slowdown. The Hang Seng Index gave up most of its opening gains immediately after the data release, sitting just 0.1% higher, but then reversed direction minutes later to claw its way up to a 0.8% gain. On the Chinese mainland, the Shanghai Composite Index also recovered from slight losses immediately after the data, to take a 0.3% gain. Mainland Chinese banks recorded broad-based gains, with Industrial & Commercial Bank of China Ltd. climbing 3.2%, Bank of China Ltd. up 2.8%, Bank of Communications Co. rising 2.6%, and China Construction Bank Corp. higher by 2.5%. By far the biggest gainer, Alibaba Health Information Technology Ltd. soared 71%, after parent Alibaba Group Holding Ltd. said it would transfer its Tmall online-pharmacy business to Alibaba Health in exchange for $2.5 billion worth of shares and convertible debt. After the deal, Alibaba Group's stake in the health-care company would increase to more than 50%, making it a consolidated subsidiary. The energy sector also shined after Nymex crude prices topped $53 a barrel to settle at their highest level in a week overnight. Cnooc Ltd. rallied 4.4%, China Petroleum & Chemical Corp. (Sinopec) jumped 3.5%, Kunlun Energy Co. advanced 2.5%, and PetroChina Co. rose 1.9%. China Oilfield Services Ltd. also improved by up 2.1%. On the downside, online major Tencent Holdings Ltd. extended previous losses to decline 2.2%. Fellow index heavyweight China Mobile Ltd. also retreated, dropping 1.9%.
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