Hong Kong Stocks Jump Most in Five Weeks as Oil Prices Ease; Cathay Rises
Hong Kong stocks rose, sending the Hang Seng Index to its highest level in five weeks, after crude oil prices fell, easing concern higher energy costs will derail a global economic recovery.
Cathay Pacific Airways Ltd. (293), Hong Kong’s No. 1 airline, jumped 4.5 percent after reporting net income tripled and on the prospect of lower fuel costs. Air China Ltd. (753) advanced 1.1 percent. Cosco International Holdings Ltd., which provides shipping-related services, rose 6.3 percent. Cnooc Ltd. (883), China’s largest offshore energy producer, slid 0.3 percent after oil fell for a second day.
The Hang Seng Index gained 0.4 percent to 23,810.11 at the close of trading, the highest level since Feb. 2, with almost four stocks advancing for each that fell on the 45-member gauge. The Hang Seng China Enterprises Index of so-called H shares of Chinese companies climbed 0.8 percent to 13,088.93 today.
“The market will gradually shift away from concern about oil prices to the strong recovery in emerging economies,” said Danny Yan, a Hong Kong-based fund manager at Haitong International Asset Management, which oversees $600 million. “In the medium term, energy demand should pick up in the U.S. and Europe on positive signs of an economic recovery.”
The Hang Seng Index (HSI) has risen 3.4 percent this year as corporate earnings and positive economic data from the U.S. eased concern surging oil prices and tensions in the Middle East will hamper global economic growth. Shares in the gauge traded at an average 12.9 times estimated earnings, according to data compiled by Bloomberg.
Airlines, Shipping
Airlines and shipping companies gained, while oil explorers fell, after crude prices dropped for a second day in New York as members of the Organization of Petroleum Exporting Countries considered talks about increasing production because violence is disrupting supplies from Libya.
Cathay Pacific jumped 4.5 percent to HK$18.94. The airline posted the biggest increase on the Hang Seng Index after reporting annual net income that beat analyst estimates. Cathay Pacific posted HK$14 billion ($1.8 billion) in profit, exceeding the average HK$13.4 billion of 15 analyst estimates compiled by Bloomberg. Air China increased 1.1 percent to HK$7.46.
Cosco International, which gets more than half of its revenue abroad, added 6.3 percent to HK$5.09. Cosco Pacific Ltd., a container-terminal operator, gained 1.1 percent to HK$14.86.
Oil producer Cnooc fell 0.3 percent to HK$18.32. PetroChina Co., the nation’s No. 1 energy producer, slipped 1.1 percent to HK$10.98.
Crude oil for April delivery dropped as much as 66 cents to $104.36 a barrel in electronic trading on the New York Mercantile Exchange.
Shipping-related companies also gained today after the Baltic Dry Index, a measure of commodity shipping costs, rose 3 percent yesterday, its eighth straight day of advances.
Among other stocks that rose, New World Development Co., a property developer, advanced 0.7 percent to HK$14.46. The company will reapply to list shares of its iron-ore mining unit on the city’s exchange, the Hong Kong Standard reported, citing people it didn’t identify.
Phoenix Satellite Television Holdings Ltd., a broadcaster, also gained after it said its full-year net income increased by 41 percent to HK$421.8 million from a year earlier. The shares advanced 7 percent to HK$2.92, the second-biggest increase on the Hang Seng Composite Index.
Futures on the Hang Seng increased 0.1 percent to 23,760. The HSI Volatility Index, the benchmark gauge for Hong Kong stock options, lost 1.1 percent to 18.50, indicating options traders expect a swing of 5.3 percent in the Hang Seng in the next 30 days.
To contact the reporter on this story: Anna Kitanaka in Tokyo at akitanaka@bloomberg.net.
To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net.
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