HONG KONG (Nikkei Markets) -- Hong Kong shares headed higher on Monday, reversing early losses as Chinese equities staged a recovery after some economic data beat market estimates.
The Hang Seng Index had risen 0.2% to 28,532.85 by noon after falling as low as 28,071.19 earlier. Internet heavyweight Tencent Holdings advanced 0.9%. Drugmakers CSPC Pharmaceutical Group and Sino Biopharmaceutical jumped 7.8% and 4.6%, respectively.
Ping An Insurance Group slipped 0.3%. The Chinese insurer on Friday said it plans to invest in online education company iTutorGroup. It did not disclose financial terms.
The Hang Seng China Enterprises Index of large mainland companies listed in Hong Kong rose 0.4%, erasing early losses, while the Shanghai Composite Index was up 0.8% after falling as much as 1.5% earlier.
Recovery for mainland stocks came after data released on Monday showed China's gross domestic product grew 6.2% in the April-to-June quarter, in line with estimates compiled by Reuters and Bloomberg. The pace was slower than the first quarter's 6.4% growth and the weakest in at least 27 years, according to Reuters.
Meanwhile, data showed China's industrial production grew 6.3% in June, up from a 5% pace in May and better than the 5.2% economists polled by Bloomberg were expecting. Retail sales rose 9.8% last month, picking up pace from May's 8.6%. Economists polled by Reuters were expecting a reading of 8.3%.
"Many are just reacting to new economic data," said Kevin Leung, director of global investment strategy at Haitong International Securities.
Early losses for the Hang Seng Index came amid caution ahead of the Chinese economic data releases, and after Budweiser Brewing Company APAC called off its share offering in Hong Kong, citing "several factors, including the prevailing market conditions."
Despite recent gains for the Hang Seng Index, turnover has remained weak, said Louie Shum, CEO at Sincere Securities, adding that advances do not necessarily imply good market liquidity.
U.S. equities closed at record highs on Friday amid mounting expectations that the Federal Reserve will cut interest rates at its policy review later this month. In a testimony before U.S. lawmakers last week, Fed Chairman Jerome Powell signaled the central bank is ready to lower interest rates at its July meeting. Powell is due to speak at a dinner in Paris on Tuesday before a quiet period until the two-day meeting commences on July 30.
The People's Bank of China may have a "little bit of incentive" to act after the Fed cuts rates this month, Haitong International's Leung said. "Let us wait and see."
Genscript Biotech slid 4.6% in Hong Kong after saying it expects to report a loss of $29.4 million to $44.2 million for the six months ended in June, compared with a profit of $17.6 million a year ago.
China Xinhua Education rose 7.5% after the higher education school operator said its consolidated affiliate is buying a 60% stake in each of two schools owned by Fuda Company for 918 million yuan ($133.5 million) through steps that include an issue of shares.
Zoomlion Heavy Industry Science and Technology added 5.2% after the Chinese construction machinery maker said it expects net profit for the January to June period to increase 171.7% to 212.4% from a year ago.
Chinese cement producer BBMG added 1.3% after saying it expects profit for the six months ended in June to have risen 30% to 41% from a year ago.
Angang Steel declined 0.9% after saying it expects profit for the six months ended June 30 to have declined from a year ago.