Hong Kong and China shares traded higher on Monday morning, with investors focused on earnings and taking the Chinese central bank's latest tightening move late on Friday in their stride as concern over Japan and Libya eased.
The benchmark Hang Seng Index was up 1.23% at 22,574.01 by the midday trading break. It opened above its 200-day moving average for the first time in three sessions.
The Shanghai Composite Index was up 0.2% at 2,911.5.
CHINA STOCKS SHAKE OFF RRR RISE
The financial sub-index was up 0.4 percent after the People's Bank of China announced a 50 basis point reserve requirement rise that will freeze up an estimated 360 billion yuan ($55 billion) when it takes effect on Friday.
Although China's benchmark short-term money market rate jumped nearly 100 basis points on Monday after the announcement, financial stocks had largely already priced in liquidity tightening.
"A lot of market participants had been expecting an RRR increase, so today's market reaction wasn't that big," said Xiangcai Securities analyst Cheng Yi in Shanghai.
Industrial and Commercial Bank of China Ltd , the country's largest bank, was up 0.7%, and Bank of China Co Ltd, due to announce earnings later in the week, rose 0.3%.
Rising crude oil prices as western forces launched a military campaign against Libya drove up shares of energy companies.
PetroChina Co Ltd, China's biggest listed company by market value, rose 1.6 percent, also boosted by a record quarterly profit announced last week.
China Shenhua Energy Co Ltd, the country's largest listed coal company, rose 1.4%.
The market would likely remain near 3,000 points with support from the 125-day moving average currently at 2,859 points in the absence of a bigger external push, said Cheng.
HONG KONG GAINS AS EARNINGS COME INTO FOCUS
Upcoming 2010 earnings announcements, rather than the latest tightening move by the Chinese central bank, were seen as a factor behind tepid price movements among Chinese banks in Monday morning trade.
Bank Of China Ltd , which is expected to announce its 2010 results on Friday, edged up 0.5%. Industrial And Commercial Bank Of China Ltd gained 0.8%.
Foxconn International Holdings Ltd led gains, up 4.2% on what analysts said was speculative buying ahead of its earnings announcement on March 30.
"It doesn't matter if [the earnings are expected to be] good or bad, investors are simply looking for reasons to trade," said KSI Asia Chief Operating Officer Ben Kwong.
A 12% slide last week made Foxconn technically over sold, with its relative strength index (RSI) hitting the lowest-ever level of 9.9% last Friday. A reading below 30 suggests a stock is over sold.
