6:00AM New York, 6:00PM Hong Kong – Hong Kong stocks edged lower after the market reversed its earlier gains.

Hong Kong stock indexes reversed 1.8% % gain in the morning session to close marginally up as commodity and energy stocks continue to rise on the back of metals and crude oil gains.

Market sentiment

In Hong Kong trading the Hang Seng Index rose 0.1% or 32.42 to 23,623, and the China Enterprises index of H shares, or Hong Kong-listed shares in mainland companies, remained unchanged at 13,561.88.

Daily turnover on main-board was HK$75.4 billion compared to HK$89.7 billion yesterday.

World Bank: China’s growth may continue

The People’s Daily online quoted World Bank Chief Economist and Deputy President Justin Yifu Lin’s interview with Swedish newspaper Svenska Dagbladets forecasting that China’s economy will continue to grow between 8% and 10% in the next 20 years to 30 years.

Lin added that by 2030 the Chinese economy will be bigger than that of the US and China''s per capita income will be 30% to 50% of the U.S. level on the rising technical abilities of the country.

""They have the advantage of labor resources so that they can move from sector to sector. And another reason is that China itself is a great market, so it can both sell its product in China and sell it abroad."" Lin commented to the Swedish newspaper.

M&A activity adds Rmb73.9m billion

Xinhua News Agency reported today that China has set up a 25-member committee to review mergers and acquisitions and ensure transparency and quality of the examination and approval of such projects.

A consulting 15-member committee was nominated to advice on the rule and regulation framework for M&A industry.

Statistics from the China Regulatory Commission show that M&A activity added Rmb73.9 billion into listed Chinese companies and increased the market value of the companies by Rmb770 billion, while raising their average earnings per share by 75% in the last year.

Gainers & Losers

Energy stocks advanced in today’s trading after crude oil prices edged higher and stayed above $100 a barrel as investors continued to hedge their positions against weakening dollar. PetroChina Co Ltd jumped 1.4% to HK$11.86 and CNOOC Ltd increased 1.6% to HK$12.98.

Similarly, commodity stocks rallied on record gold prices after a slumping dollar drove investors to yellow metal and other precious metals. Gold prices increased to $924.60 a troy ounce in Europe and rose to $935.70 in New York.

Zijin Mining rose 2.8% to HK$10.2 as a result. Other commodity stocks increased as well. Aluminum Corp of China gained 5.4% to HK$14.94 and Jiangxi Copper edged up 6.3% to HK$18.26.

Rising crude oil prices affected property and airlines.

Property stocks rose on speculation the U.S. Federal Reserve may not aggressively cut its key rate on the rising inflation and lowered economic growth forecast from the Fed. Sun Hung Kai Properties fell 3.1% to HK$132.7 and Cheung Kong Ltd shed 1.9 % to HK$114.7.

Cathay Pacific Airways declined 2.2% to HK$16.18 and China Eastern Airlines fell 1.9% to HK$5.31 on fears rising fuel prices will increase costs.

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