Nikkei: 10,634.40 (+42.36) Hang Seng: 23,484.30 (–69.29) Shanghai Comp: closed for holiday

HONG KONG stocks failed to sustain mild opening gains for a second session yesterday as property developers and local banks dipped while defensives such as telecoms outperformed.

Some market players said talk that inflation in China could rise to 6 per cent by March was fuelling concern over tightening, weakening investor conviction.

Heavyweight HSBC Holdings rose 0.9 per cent, lending some support to the broader market. However, the gains were not enough to offset weakness in local property developers. Cheung Kong fell 3.1 per cent, while rival Sun Hung Kai Properties shed 2.2 per cent.

Japan’s Nikkei average hit a new nine-month peak as investors pile into riskier assets in developed economies on hopes for a steady economic recovery.

Japan Tobacco, the world’s third biggest cigarette maker, gained 0.8 per cent to 335,500 yen in heavy trade. Nippon Meat Packers surged 6 per cent to 1,189 yen after reporting that nine-month operating profit rose 14.5 per cent from a year earlier.

Chinese markets will reopen today after the New Year holiday. – (Reuters)