(Corrects the second and 12th paragraphs to show that the restriction applies to Chinese nationals who are not registered as residents of Shanghai.)
Hong Kong stocks rose, with the Hang Seng Index (HSI) set for its longest streak of monthly gains in two years, after confidence improved among U.S. and European consumers, boosting the outlook for the global economy.
Yue Yuen Industrial Holdings Ltd., a maker of shoes for Nike Inc., advanced 3.7 percent. Air China Ltd. (601111) gained 1.9 percent after oil retreated from a 10-month high, easing concern fuel costs will hurt the carrier’s earnings. China Overseas Land & Investment Ltd. (688), the biggest mainland developer listed in Hong Kong, dropped 2.5 percent after a report non-local residents would not be allowed to buy second homes in Shanghai.
The Hang Seng Index increased 0.5 percent to 21,680.08 as of the 4:00 p.m. close in Hong Kong. The gauge rose 6 percent this month, advancing for a third month, on signs the U.S. economy is improving and Europe will contain its debt crisis. The Hang Seng China Enterprises Index (HSCEI) of mainland companies climbed 0.6 percent to 11,826.76 today.
“Investor sentiment has gone from extreme pessimism to one of optimism,” said Nader Naeimi, a Sydney-based senior strategist at AMP Capital Investors Ltd., which manages nearly $100 billion. “Improvements in the jobs and housing markets really isolated the U.S. from what’s happening in Europe. Europe didn’t turn out as bad as the market feared because of the actions taken by the European Central Bank.”
The European Central Bank will today offer a second round of loans to Europe’s banks to ease credit costs in the region. Equity markets have risen since the bank on Dec. 21 allowed lenders to borrow as much money as they wanted at the benchmark rate for three years.
Futures on the Standard & Poor’s 500 Index added 0.1 percent today. The gauge advanced 0.3 percent in New York yesterday after a report U.S. consumer confidence rose to the highest level in a year. The Dow Jones Industrial Average gained 0.2 percent to its first close above 13,000 since May 2008.
Exporters and shipping lines gained on rising U.S. sentiment. Shares also climbed after an index of executive and consumer confidence in the euro area rose for a second month.
Yue Yuen (551), which gets about half of its sales from the U.S. and Europe, increased 3.7 percent to HK$26.70. Foxconn International Holdings Ltd. (2038), a maker of mobile phones that counts Nokia Oyj among its customers, rose 0.4 percent to HK$5.45. China Shipping Container Lines Co., the nation’s second-biggest box-cargo carrier, added 0.8 percent to HK$2.66.
BYD Co., the Chinese carmaker partly owned by Warren Buffett’s Berkshire Hathaway Inc., climbed 2.4 percent to HK$25.50. The Shenzhen-based automaker yesterday reported full- year profit fell 44 percent 1.4 billion yuan ($222.4 million), beating the 968 million yuan estimate of analysts surveyed by Bloomberg.
Of the 48 companies on the Hang Seng Composite Index that posted earnings since Jan. 9, 18 missed estimates, while 10 exceeded expectations, according to Bloomberg data.
Airlines advanced after crude futures retreated from an 10- month high set on Feb. 24. Air China, the world’s biggest carrier by market value, gained 1.9 percent to HK$5.86. Cathay Pacific Airways Ltd. (293) climbed 3.5 percent to HK$15.40.
Mainland developers declined after China Business News reported that Shanghai won’t allow Chinese nationals who are not registered as residents of the city to buy second homes. The clarification means 671,000 people with residence permits as of March 2009 would be excluded from the pool of buyers, it said. The story followed a report from the state-run Xinhua news agency last week that the rules had been changed to allow the additional purchases.
China Overseas Land slipped 2.5 percent to HK$16.26. Country Garden Holdings Co. (2007), a Guangdong-based real estate company, sank 4.1 percent to HK$3.51.
The Hang Seng Index has risen 18 percent this year. The rally boosted the price of shares on the gauge to 11 times estimated earnings as of yesterday. That compares with 13.2 times for the Standard & Poor’s 500 Index and 11.1 times for the Stoxx Europe 600 Index.
Futures on the Hang Seng (HIH2) expiring in March rose 0.7 percent to 21,650. The HSI Volatility Index slid 3.7 percent to 21.21, indicating options traders expect a swing of 6.1 percent in the benchmark index over the next 30 days.
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