Hong Kong Stocks Recover From Heavy Decline

Hong Kong stocks staged a mild rebound Wednesday morning, seeing brief seesaw trading at open but then gaining after HSBC said its China service-sector gauge hit a four-month high in April. The Hang Seng Index was up 0.3%, and the mainland-China-tracking Hang Seng China Enterprises Index rose 0.6%. The benchmark index had fallen sharply the previous day on worries that the Chinese government might hike the stamp tax for securities tradings. Early into the Wednesday session, stocks got a boost from news the HSBC China services Purchasing Managers Index had risen to 52.9 in April, up from 52.3 in March. In Hong Kong, several major Chinese brokers recovered modestly from their steep falls Tuesday, sparked by reports of tightened margin-financing rules to control risks. Shenyin Wanguo HK Ltd. rebounded 1.7%, after losing 5.8% on Tuesday, Citic Securities Co. bounced back by 0.8%, and Haitong Securities Co. edged up 0.2%. Likewise, Guotai Junan International Holdings Ltd. advanced 2.4%, China Galaxy Securities Co. rose 1.3%, and First Shanghai Investments Ltd. added 1.3%. However, Haitong International Securities Group Co. extended losses by 0.7%. Major Chinese banks also traded mostly higher, with China Minsheng Banking Corp. rising 1.3%, both Bank of China Ltd. and China Construction Bank Corp. up 1.2% each, and China Merchants Bank Co. higher by 1.1%. Chinese insurers headed higher too, as China Pacific Insurance Group Co. rose by 2.5%, China Life Insurance Co. tacked on 2.3%, Ping An Insurance Group Co. moved up 2.1%, and People's Insurance Company Group of China Ltd. cracked 1.7% higher. Among the decliners were the big telecoms operators, as China Unicom Hong Kong Ltd. declined 1.9%, China Mobile Ltd. lost 0.9%, and China Telecom Corp. moved lower by 0.4%. Among other notable movers, HSBC Holdings PLC drifted 0.2% higher after posting a roughly 2% gain to its quarterly profit, while Tencent Holdings Ltd. dropped 0.3%. Meanwhile, on the Chinese mainland, the Shanghai Composite Index advanced 0.2% following a 4% tumble the previous day, when it was rattled by the possible tightening of margin-lending regulations.