Hong Kong stocks rose, sending the Hang Seng Index to its third straight weekly gain, as signs the U.S. economy is recovering drove exporters and commodity producers higher on optimism earnings will improve.
Jiangxi Copper Co., China’s No. 1 producer of the metal, added 2.3 percent after commodity prices climbed. PetroChina Co., the nation’s largest oil company, rose 2.3 percent. Li & Fung Ltd. (494), the world’s biggest outsourcer to retailers including Wal-Mart Stores Inc., gained 0.4 percent after a report showed U.S. companies in June added twice as many workers as forecast.
“Unemployment is one of the key focuses for investors, and if that’s getting better the market will be cheered,” said Grace Tam, Hong Kong-based vice president of investment services at JPMorgan Asset Management Ltd., which manages about $94 billion in Asia-Pacific assets. “It looks like we’re nearing the end of a mid-cycle slowdown and that the market will pick up again. Most sectors will benefit.”
The Hang Seng Index rose 0.9 percent to 22,726.43 at the 4 p.m. close of trading in Hong Kong, ahead of the release tomorrow of Chinese inflation data. The gauge closed up 1.5 percent for the week after U.S. manufacturing accelerated and Europe pulled Greece back from the brink of default, improving the outlook for Asian exporters and banks.
The Hang Seng China Enterprises Index of Chinese companies’ H shares advanced 0.9 percent to 12,756.32 today.
Li & Fung gained 0.4 percent to HK$14.82. Esprit Holdings, a clothier that gets more than 85 percent of its revenue outside Asia, rose 1.8 percent to HK$25.
U.S. companies added 157,000 workers last month, up from 36,000 in May, according to ADP Employer Services. The median forecast in a Bloomberg News survey was for 70,000 new jobs. Also, sales reports indicated shoppers took advantage of discounts by retailers in June to clear inventory.
Energy stocks advanced as crude oil for August delivery rose 2.1 percent in New York yesterday, while an index of prices for six metals including copper and aluminum increased 2 percent to the highest level since May 3.
Jiangxi Copper advanced 2.3 percent to HK$27.05. Aluminum Corp. of China Ltd. climbed 1.6 percent to HK$6.46. PetroChina rose 2.3 percent to HK$11.78 and rival Cnooc Ltd. jumped 1.8 percent to HK$18.50.
End to Tightening
All four industry groups tracked on the Hang Seng Index (HSI) rose, even as the recommendation on Chinese and Hong Kong stocks was cut to “underweight” from “neutral” at JPMorgan Chase & Co. Speculation China’s policymakers are ending their monetary- tightening efforts is “premature,” the bank said.
The People’s Bank of China raised interest rates this week for a fifth time since the start of last year to cool inflation that reached a 34-month high of 5.5 percent in May. A report tomorrow is expected to show inflation accelerated to 6.2 percent in June, according to the median forecast in a Bloomberg News survey of economists.
Property stocks also climbed as companies reported higher revenue. China Overseas Land and Investment Ltd. gained 1.9 percent to HK$17.46 after saying property sales in June rose 101 percent from a year earlier.
Glorious Property Holdings Ltd. (845) jumped 4.8 percent to HK$2.62 after revenue more than doubled in June from a year earlier. Minmetals Land Ltd. (230), another property company, rose 1.5 percent to HK$1.38 after saying first-half sales soared 263 percent from a year earlier, even as the average selling price fell 8 percent.
TCL Communication Technology Holdings Ltd. (2618), a handset manufacturer, gained 8.9 percent to HK$7.24 after saying it expects a “significant increase” in profit in the first half of 2011. Maanshan Iron & Steel (600808) Co. climbed 1.7 percent to HK$3.70. The steelmaker won approval from the China Securities and Regulatory Commission to sell bonds, according to a statement yesterday.
Futures on the Hang Seng Index rose 1 percent to 22,775. The HSI Volatility Index fell 2.6 percent to 17.11. The benchmark gauge for Hong Kong stock options indicates traders expect a swing of 4.9 percent in the Hang Seng Index in the next 30 days.
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