HONG KONG, May 30 (Reuters): Hong Kong shares are set to end their best month this year on Friday, underpinned by strength in property developers and Chinese banks.
China shares reversed earlier losses in late morning trade, even as the property sector remained a drag.
Hong Kong and mainland benchmark indexes are still down on the year, with markets awaiting China's official manufacturing purchasing managers' index for May due on Sunday, which is likely to have inched up to 50.6 in May from April's 50.4, according to a Reuters poll.
"Hong Kong market is still very cautious, trading on good news that Wall Street still broke the record. However, A-shares are not moving, holding back the Hong Kong market," said Jackson Wong, vice-president of Tanrich Securities, adding that investors tend to take profits before the holiday.
Both Hong Kong and China markets will be closed on Monday for the Dragon Boat Festival.
By midday, the Hang Seng Index rose 0.2 per cent to 23,062.25 points, while the China Enterprises Index of the leading offshore Chinese listings in Hong Kong climbed 0.5 per cent. They are headed for their best month this year, up 4.2 and 4.7 per cent, respectively.
The CSI300 of the largest Shanghai and Shenzhen A-share listings was up 0.1 per cent and is set for a flat finish in May, while the Shanghai Composite Index was flat at 2,040.64 points but is so far up 0.7 per cent on the month.
Chinese property developers were the big index drags as investors took profits on recent gains. Risesun Real Estate Development lost 2.3 per cent in Shenzhen, and Poly Real Estate Group shed 1.0 per cent in Shanghai.
In contrast, Hong Kong developers outperformed, with Cheung Kong Holdings up 1.7 per cent to its highest since January 2008. Sun Hung Kai Properties also added 0.9 per cent.
