Hong Kong shares climb on China's stimulus pledge

Hong Kong stocks advanced on Tuesday after Chinese officials pledged they would unveil a slew of measures to shore up economic growth, and reiterated confidence in the stability of yuan. ** The Hang Seng index settled 2 percent higher at 26,830.29 points. The Hang Seng China Enterprises index also rose 2 percent. ** The sub-index of the Hang Seng tracking energy shares rose 2.7 percent, while the IT sector gained 2.2 percent, the financial sector ended almost 2 percent higher and the property sector rose 1.7 percent. ** China's state planner pledged on Tuesday to improve its "reserve" of economic policies to boost economic growth, a day after Premier Li Keqiang said the central government was seeking a strong start to the economy in 2019. ** China aims to complete 2019 local government special bond issuance by September, an assistant finance minister said on Tuesday. ** When asked if the central bank should lower benchmark interest rates, Zhu Hexin, a deputy govenor at the People's Bank of China, said there was room for improvement in monetary policy, and did not rule out such a cut. ** Zhu also said that China is confident it can keep its foreign exchange rate stable despite cuts in banks' reserve requirement ratio, a key policy-easing measure. ** The slew of signals for stronger policy support lifted Asian and Chinese shares on Tuesday. ** China's main Shanghai Composite index closed up 1.4 percent at 2,570.34 points, while the blue-chip CSI300 index added close to 2 percent. ** Around the region, MSCI's Asia ex-Japan stock index was firmer by 1.4 percent, while Japan's Nikkei index closed up almost 1 percent. ** The yuan was quoted at 6.7494 per U.S. dollar at 08:22 GMT, 0.26 percent firmer than the previous close of 6.7670. ** While the policy announcements are positive for Hong Kong equities in the short run, Tuesday's rally may not last long, said Ben Kwong, director of research at KGI Asia in Hong Kong, adding that global risks, such as Brexit and potentially poor U.S. corporate earnings, could also sway the local market. ** "The (Hong Kong) market is mostly speculating on news," he said. "When it (Hang Seng index) reaches a certain level, when people start to consider that the impact of these policies won't come until later, (share) prices may reverse a little." ** The top gainer on the Hang Seng was AAC Technologies Holdings Inc, which gained 5.2 percent. ** The top gainers among H-shares were China Tower Corp Ltd , up 5.4 percent, followed by China Life Insurance Co Ltd gaining 4.3 percent and CNOOC Ltd rising 4.1 percent. ** About 1.88 billion Hang Seng index shares were traded. Trading volume in the previous session was 1.47 billion. ** At close, China's A-shares were trading at a premium of 17.92 percent over the Hong Kong-listed H-shares. (Reporting by Noah Sin; Editing by Shreejay Sinha)