Update | Hong Kong and mainland stocks advance as property developers and liquor distillers lead rally

Hong Kong and mainland Chinese stocks climbed on Thursday, as property developers gained on optimism about strong sales while Kweichow Moutai raised the price of its fiery liquor.

Hong Kong’s benchmark Hang Seng Index advanced 0.9 per cent, or 266.05 points, to 29,863.71 at the close, while the Hang Seng China Enterprises Index rose 0.6 per cent. The Shanghai Composite Index also added 0.6 per cent.

Trading on both markets was light as traders remained on the sidelines in the build-up to the New Year holiday. Trading values in Hong Kong was 36 per cent below the 30-day average, while the volume on the Shanghai bourse almost matched the average level, according to data compiled by Bloomberg.

Country Garden Holdings and China Overseas Land & Investment led the rally among Chinese developers in Hong Kong, after one of the mainland’s biggest investment banks, China International Capital Corp (CICC), reported sales growth in the first and second-tier cities during the first three weeks of December.

Moutai, the distiller of a fiery liquor baijiu used in China’s state banquets, rose 8.2 per cent to 718.69 yuan, closing in on its record close of 719.11 yuan in November, after announcing that it would raise its prices by 18 per cent starting next year. The liquor, a favourite of Mao Zedong, is often seen as a symbol of conspicuous consumption among Chinese officials.

In addition to raising prices, Moutai also forecasted a 58 per cent increase in 2017 gross profit, on the back of a 50 per cent gain in sales, according to an exchange filing. The Guizhou-based distiller is aiming for a 2018 sales growth of more than 10 per cent, the statement said.

Moutai’s gains spilled over to other distillers. Jiangsu Yanghe Brewery Joint-Stock added 4.4 per cent to 118.22 yuan, while Wuliangye Yibin gained 3.8 per cent to 80.86 yuan.