Hong Kong Shares Gain 1 Pct To Snap 4-Day Slide

Financial stocks weighed down the broad market on looming concerns over banks` earnings.

Hong Kong shares shares snapped four days of declines to finish 1 percent higher on Monday as rising oil prices lifted commodity stocks, but price movements were exaggerated by slim turnover in another holiday-shortened week.

Financial stocks weighed down the broad market on looming concerns over banks' earnings.

Offshore oil producer CNOOC jumped 3.9 percent after crude prices moved close to $40 per barrel in Asian trade on fears of supply disruptions after violence flared between Israel and Hamas.

Gold miner Zijin Mining shot up 8.4 percent, tracking strong gains in the price of the precious metal, which rose to an 11-week high on Monday.

The Hang Seng Index ended 144.34 points higher at 14,328.48 after dropping to 13,924.32 earlier.

China's third-largest lender, Construction Bank, dropped 1.4 percent.

Credit deterioration and recapitalisation worries continued to hound HSBC, which fell 0.6 percent, taking its decline this month to more than 12 percent.

Turnover fell to HK$21.9 billion, the lowest in a full trading day in more than two years.

"There is no guarantee we will see a lot of window dressing this year-end. Actually, there is no need for window dressing, no need to push up the market when the macro economic outlook is this weak," said Linus Yip, strategist with First Shanghai Securities.

Yip said the market had already hit its medium-term peak of 15,781 points earlier in December and continued to lose momentum. With a 48 percent drop so far this year, 2008 ranks among the worst yearly performances for the local bourse.

"The pressure may grow larger going forward as the U.S. corporations begin to report their results in January," said an analyst with ICEA, a subsidiary of Chinese bank ICBC.

"We are afraid that the figures will still be lower than already lowered expectations. Above all, the corporate managers will probably comment about the poor outlook while releasing the results, which will of course dent sentiment."

The China Enterprises Index of top locally listed mainland Chinese firms rose 1.5 percent to 7,797.78, led by a 3.1 percent rally in Asia's biggest oil & gas producer, PetroChina.

Shares in CITIC Pacific soared 7.4 percent after it confirmed CITIC Group had become the majority shareholder in the Beijing-backed conglomerate, holding 57.56 percent of the company, after it completed the conversion of convertible bonds into 1.45 billion shares in the Hong Kong-listed firm.

The equity dilution, part of the bailout plan for CITIC Pacific, removed the overhang on the stock which had been battered since the company revealed a $2 billion hedging loss in October, brokers said.

Fixed-line provider PCCW rose 3 percent after Richard Li-controlled Pacific Century Regional Development said its shareholders had approved a plan to take PCCW private.

PCCW, which is also controlled by the Hong Kong-based tycoon, will hold a shareholder meeting on Tuesday to consider the HK$15.941 billion ($2.06 billion) buyout offer from PCRD and China Netcom.