Hong Kong stocks rose, with the city’s benchmark index heading toward the highest close since February, as HSBC Holdings Plc led banks higher after beating earnings estimates and Chinese exports accelerated.
HSBC, Europe’s biggest lender, climbed 1.6 percent. China Mengniu Dairy Co., the country’s largest dairy producer, added 0.9 percent after agreeing to buy a stake in China Modern Dairy Holdings Ltd. Esprit Holdings Ltd., a Hong Kong-based clothier that gets about 79 percent of sales from Europe, sank 4.2 percent after forecasting a “substantial” loss.
The Hang Seng Index (HSI) gained 0.6 percent to 23,166.11 as of 10:23 a.m. in Hong Kong. Trading volume was 9.6 percent above the 30-day intraday average. The Hang Seng China Enterprises Index of mainland stocks rose 0.7 percent to 11,190.67.
“Valuations look attractive,” said Andrew Sullivan, director of sales trading at Kim Eng Securities Hong Kong Ltd, a brokerage unit of Malayan Banking Bhd. “People are happy to be involved in the market but they’ve also got their eye on the door. The earnings uptick that we’re seeing among banks has very much to do with writing back of impairment rather than real growth. That will worry people.”
The Hang Seng Index climbed 7.1 percent from this year’s low on April 18 through yesterday as data from the U.S. signaled an improving economy, outweighing slower growth in China. The equity measure traded at 10.8 times estimated earnings, compared with 14.7 for Standard & Poor’s 500 Index, according to data compiled by Bloomberg.
Futures on the Hang Seng Index added 0.6 percent to 23,043. The HSI Volatility Index dropped 0.6 percent to 14.83, indicating traders expect a swing of 4.3 percent for the equity benchmark in the next 30 days.
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