HK shares surge 5.7 pct on Obama victory

By Jun Ebias HONG KONG, Nov 5 (Reuters) - Hong Kong shares jumped 5.7 percent on Wednesday, led by banking stocks, in what many market watchers consider a short-term relief rally after Democrat Barack Obama won the U.S. presidential election. Chinese financial stocks such as Construction Bank gained for a third straight day, while energy stocks such as PetroChina climbed after a surge in crude oil prices. Stock markets around Asia cheered Wall Street's biggest ever Election Day gain, with Tokyo's Nikkei average up 2.6 percent and Shanghai's main index up 4.2 percent. "The U.S. election is offering a kind of change that investors have been waiting for. It's a stimulus to investor confidence," said Winson Fong, managing director at SG Asset Management in Hong Kong. "Hedge funds are awash with cash, so it is time to invest and make money.

It is dangerous to ignore these stocks at these levels. They are too cheap," Fong said. Shares in PCCW soared 29 percent in their biggest one-day percentage gain in nine years. The stock resumed trading after tycoon Richard Li led a $2 billion buyout offer by major shareholders in the city's dominant fixed-line operator. But market watchers expect minority investors will shoot down the HK$4.20 per share offer as it is below market expectations. The benchmark Hang Seng Index ended the morning session up 812.53 points at 15,196.87 after opening 4.6 percent higher. The index had rallied to 15,317.83 earlier. "The Obama win is at best a short-term stimulus for the market. It won't do anything to change the fundamentals of the economy in the near term," said Sean Tsang, senior vice president with Polaris Securities in Hong Kong. "There are some major policy expectations from the new administration but those will take effect in the mid to long term." Shares across the board rallied, with advancing stocks outpacing decliners 651 to 135. Mainboard turnover rose to HK$36.1 billion ($4.6 billion) from HK$25.4 billion by midday on Tuesday. The China Enterprises Index of top locally listed mainland Chinese companies surged 9.3 percent to 7,499.59, with all its constituents firmly in the black. Chinese financials notched up strong gains, drawing strength from the jump on the Shanghai Composite Index. Top lender Industrial & Commercial Bank of China gained 7.4 percent, extending its rally into a third straight session on hopes of easier lending on the mainland. No.3 lender China Construction Bank shot up 11.3 percent, taking its total gains so far this week to nearly 20 percent. BNP Paribas upgraded the sector to neutral from underweight on attractive valuations. China Life, the most traded issue of the morning, surged 9.2 percent, while smaller rival Ping An Insurance put on 10.3 percent. A 10 percent jump in oil prices overnight sent energy stocks soaring.

Asia's largest oil and gas producer, PetroChina , advanced 7.8 percent, while Sinopec Corp, Asia's largest refiner and China's second-biggest oil producer, moved up 10.1 percent. CNOOC, the smallest player in China's energy producing triumvirate, surged 7.5 percent. China Shenhua Energy, the world's most valuable coal miner, gained 9.8 percent. Mainland property counters built on earlier gains on hopes that easing lending curbs would help demand for real estate. China Overseas Land Investment climbed 11.4 percent while China Resources Land added 10.4 percent. For the latest U.S. election coverage, click on (Additional reporting by Parvathy Ullatil; Editing by ) ASIA-PACIFIC STOCK MARKETS: Pan-Asia...... Japan........ S.Korea.... S.E. Asia............ Hong Kong... Taiwan..... Australia/NZ......... India....... China...... OTHER MARKETS: Wall Street........... Gold......... Currency..

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