Hong Kong Stocks Decline as Slowdown Weighs on Earnings

Hong Kong stocks rose, with the benchmark index advancing for the first time in four days, after Premier Wen Jiaboa’s call for more investment in infrastructure lifted railway and telecommunications shares.

China Railway Construction Corp. (1186) led gains in the sector. China Telecom Corp., the mainland’s biggest fixed-line carrier, gained 1.8 percent. Sun Hung Kai Properties Ltd. jumped 3.6 percent, leading developers higher after JPMorgan Chase & Co. raised it’s rating on the city’s largest property company.

The Hang Seng Index rose 0.1 percent to 19,419.87 at the close after earlier falling as much as 0.8 percent. Three shares gained for every two that fell on the 49-member gauge. The Hang Seng China Enterprise Index of mainland companies dropped 0.1 percent, paring losses of as much as 1.3 percent.

The benchmark Hang Seng Index (HSI) fell 10 percent from this year’s high in February on signs Europe’s debt crisis is worsening and growth is slowing in China and the U.S., dragging the value of shares on the gauge to 10.1 times estimated earnings on average. That compares with 12.9 times for the Standard & Poor’s 500 Index and 10.7 times for Stoxx Europe 600 Index.

Futures on the Hang Seng Index lost 0.2 percent to 19,395. The HSI Volatility Index (VHSI) fell 1.4 percent to 19.40, indicating traders expect a swing of about 5.6 percent in the benchmark index during the next 30 days.

To contact the reporters on this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net; Patrick Boehler in Hong Kong at pboehler@bloomberg.net

To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net

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