Hong Kong and Shanghai markets rallied on Monday, each hitting a new seven-year high, as Chinese oil and shipping shares surged on reports of possible mergers among China’s largest state-owned businesses.
In Japan, the Nikkei 225 slid 36.72 points, or 0.2%, to end Monday’s session at 19.983.32. The yen was a little weaker, with the greenback buying ¥119.21, compared with ¥118.99 late Friday in New York.
In Hong Kong, the Hang Seng index climbed 372.61 points, or 1.3%, to 28,433.59, its best close since the end of 2007
Oil and shipping shares rose sharply in both markets, after a state media report said the Chinese government may cut the number of central government-owned big companies through massive mergers.
In Hong Kong, Sinopec leapt 7.2%, PetroChina jumped 6.7%, and Connc Ltd. gained 2.3%. Sinopec Shanghai Petrochemical Co. Ltd., a Shanghai-based subsidiary of Sinopec, soared 19.5%. Oil and gas explorer Sino Oil & Gas Holdings Ltd. surged 9.4%.
Top outperformers in the shipping sector included China Cosco Holdings Co. Ltd. improving by 13.1%, and China Shipping Container Lines Co. Ltd. cracking 9.1% higher.
Meantime, Sino-British banking giant HSBC — the heaviest-weighted component of the Hang Seng Index — jumped 3.6% after a report in the Sunday Times said the company is considering plans to sell its British retail unit for 20 billion pounds ($30.4 billion U.S.).
The gains added to a previous 4.2% rally, which came after HSBC said it is looking at whether to move its headquarters out of London.
CHINA
The Shanghai CSI 300 revived 104.95 points, or 2.2%, to 4,807.59
Beijing has been mulling a merger between PetroChina Co. and China Petroleum & Chemical Corp. (Sinopec) and between Cnooc Ltd. and unlisted China National Chemical Corp., the report said.
The merged companies would then be able to compete better with international energy giants such as Exxon Mobil and BP PLC, the report added.
In Shanghai, shares of several big oil and shipping companies were suspended from trading after soaring limit-up by 10%. They included Sinopec, PetroChina, China Shipping Container Lines, China Cosco, and China Shipping Development Co. Ltd
In other markets
Markets in New Zealand were closed for holiday
In Singapore, the Straits Times Index eked up 2.85 points, or 0.1%, to 3,515.85
The Kospi index in Korea staggered 2.26 points, or 0.1%, to 2,157.54
In Taiwan, the Taiex index jumped 59.84 points, or 0.6%, to 9,973.12
In Australia, the S&P/ASX 200 jumped 49.40 points, or 0.9%, to 5,982.69
