Hong Kong Stocks Climb to Two-Week High on U.S. Jobless Data
Hong Kong shares gained, sending the Hang Seng Index to its highest level in two weeks as fewer Americans filed unemployment claims, boosting confidence in the world’s biggest economy.
Li & Fung Ltd. (494), the biggest supplier to Wal-Mart Stores Inc., rose 4.4 percent. Yue Yuen Industrial Holdings Ltd. (551), which makes shoes for Nike Inc., increased 4.5 percent. Hutchison Telecommunications Hong Kong Holdings Ltd., a phone carrier, rose 3.2 percent after it won a bid to expand services.
The U.S. economy has “bounced back off a soft patch and we are going to see much stronger growth in the labor market over the course of the next few months,” Russell Jones, global head of fixed-income strategy at Westpac Banking Corp., said on Bloomberg Television. “We are through the worst but I think that this is still going to be a pretty gradual process of normalization.”
The Hang Seng Index rose 1.2 percent to 23,408.86, its highest close since Feb. 21 and a 1.7 percent increase for the week. All but five stocks in the 45-member gauge advanced. The Hang Seng China Enterprises Index of H shares of Chinese companies climbed 1.5 percent to 12,849.77.
Today was the last day of Hong Kong stocks exchange’s two hour midday-trading break before being cut to 90 minutes from March 7. The morning session will end at 12 p.m. and resume at 1:30 p.m. local time.
Li & Fung rose 4.4 percent to HK$45.55 after U.S. reported positive economic data. Yue Yuen jumped 4.5 percent to HK$25.70. Foxconn International Holdings Ltd., a maker of mobile-phones that earns 16 percent of its revenue in America, gained 1.5 percent to HK$5.52.
U.S. Jobless Claims
The Standard & Poor’s 500 Index climbed 1.7 percent yesterday in New York, the biggest advance in three months, after the Labor Department said applications for unemployment benefits fell by 20,000 to 368,000 in the week ended Feb. 26. Economists had forecast a gain to 395,000. The total number of Americans receiving unemployment benefits fell to the lowest level since October 2008.
In a separate report, the Institute for Supply Management’s index of non-manufacturing businesses rose to 59.7, the highest level since August 2005. Economists had forecast a drop to 59.3. A reading above 50 signals growth in the service sector.
The Hang Seng rose 1.6 percent this year, as corporate earnings eased concern surging oil prices and tensions in the Middle East will derail global economic growth. Shares in the gauge traded at an average 12.7 times estimated earnings yesterday, according to data compiled by Bloomberg.
Hutchison Telecommunications jumped 3.2 percent to HK$2.89 after saying it won a bid for radio spectrum to provide mobile- telecommunication services in Hong Kong for 15 years. The carrier will pay a one-off use fee of HK$1.08 billion ($139 million) and an estimated HK$62 million aggregate annual license fee, it said.
China Life Insurance Co., the nation’s biggest insurer, increased 2.6 percent to HK$30.15 after its Chairman Yang Chao said he expects business this year to be better than in 2010. The company is in talks with the insurance regulator to obtain permission to invest in affordable housing, Yang said.
Maanshan Iron & Steel Co. jumped 5.8 percent to HK$4.22 after Shanghai Securities News reported the company will benefit from increasing production of China’s high-speed rail wheels. High-speed rail wheels sell for 60,000 yuan ($9,137) a ton, compared with 8,000 yuan to 9,000 yuan a ton for ordinary train wheels, Shanghai Securities News reported today, without citing anyone.
Futures on the Hang Seng Index (HSI) rose 1.4 percent to 23,319. The HSI Volatility Index, the benchmark gauge for Hong Kong stock options, rose 1.1 percent to 19.04, indicating options traders expect a swing of 5.5 percent in the Hang Seng Index in the next 30 days.
To contact the reporter on this story: Kana Nishizawa in Hong Kong at email@example.com.
To contact the editor responsible for this story: Nick Gentle at firstname.lastname@example.org.