HK shares rise as Evergrande's stake sale plans lift risk appetite

Hong Kong shares ended higher on Wednesday, led by property and financials stocks, as investors priced in developer Evergrande's stake sale plans, in a sign that the cash-strapped company is prioritising domestic creditors over offshore bondholders.

Hong Kong shares ended higher on Wednesday, led by property and financials stocks, as investors priced in developer Evergrande's stake sale plans, in a sign that the cash-strapped company is prioritising domestic creditors over offshore bondholders. ** The Hang Seng index ended 0.7% higher at 24,663.50, while the China Enterprises Index gained 0.5% to 8,760.44 points.

** Property stocks and financials gained 2.6% and 1.7%, respectively, after China Evergrande Group said it planned to sell a $1.5 billion stake it owns in Shengjing Bank Co Ltd to a state-owned asset management company. ** Shares of Evergrande jumped 15%, although the developer left its offshore bondholders guessing whether it would pay interest on a bond coupon due Wednesday.

** Beijing is prodding government-owned firms and state-backed property developers such as China Vanke Co Ltd to purchase some of Evergrande's assets, people with knowledge of the matter said. ** The Hang Seng Tech Index dropped 0.8%, tracking sharp declines on Wall Street on rising Treasury yields and deepening concerns over persistent inflation.

** The energy sector lost 3.8% as oil prices fell on demand concerns, while coal-related stocks plunged amid China's power supply crunch. ** The widening power crunch prompted investors to exit sectors vulnerable to factory shutdowns, dragging the materials sector down 3.4%.