Galaxy Entertainment Group Ltd. (27), the casino operator controlled by billionaire Lui Che-woo, rose 2.7 percent before the release of Macau’s September casino revenue. Hutchison Whampoa, controlled by Li Ka-shing, jumped to its highest since November 2007 on a report it may seek to raise $10 billion spinning off its Watsons retail arm. Aluminum Corp. of China Ltd., the nation’s No. 1 supplier of the commodity, slid 1.4 percent after metal prices fell as the U.S. government yesterday began its first partial shutdown in 17 years.
The Hang Seng Index gained 0.6 percent to 22,984.48 at the close in Hong Kong after falling the most in a month on Sept. 30. Two shares rose for each that fell on the 50-member gauge, with volume 16 percent lower than the 30-day intraday average. The Hang Seng China Enterprises Index (HSCEI), also known as the H-share index, added 0.2 percent to 10,333.59. Mainland markets are shut until Oct. 8.
“The market is due for a technical rebound today but not by that much,” said Norman Chan, head of investment at Calibre Asset Management Ltd. “People are still worried about what the U.S. will do -- the market expects them to resolve the issue in a few days but nobody is going to make any big moves.”
The Hang Seng Index climbed 5.2 percent last month and 9.9 percent in the three months through September, its steepest quarterly gain since the period ended March 2012, as data from China signaled the world’s second-largest economy is strengthening and the Federal Reserve unexpectedly refrained from cutting stimulus. Hong Kong’s equity benchmark traded at 11 times estimated earnings today, compared with 15.4 for the Standard & Poor’s 500 Index yesterday.
Futures on the U.S. equity gauge fell 0.7 percent. The index climbed for a second time in nine days yesterday after data from the privately run Institute for Supply Management showed U.S. manufacturing expanded in September at a faster pace than forecast, indicating factories will provide a bigger boost to the expansion.
The U.S. government yesterday began its first partial shutdown since 1996, putting as many as 800,000 federal employees out of work and halting some services. Congress also faces a dispute over raising the $16.7 trillion debt ceiling this month as Republicans continue their fight to defund President Barack Obama’s health care law. The stoppage could cost the economy $300 million a day, according to IHS Inc.
“As soon as the shutdown started the market began to rebound because the U.S. market had dropped” several days beforehand, said Calibre Asset’s Chan. “It was also helped by the rebounding economy, and we’ve seen some good figures from the U.S.”
Galaxy rose 2.7 percent to HK$55.85. Sands China Ltd., a unit of billionaire Sheldon Adelson’s Las Vegas gaming company, climbed 1.6 percent to HK$48.70. Macau’s Gaming Inspection & Coordination Bureau is expected to release its September casino revenue after an 18 percent rise in August from a year earlier.
Hutchison Whampoa increased 3.3 percent to HK$95.95, the second-biggest gain on the Hang Seng Index. The company may list Watsons on the city’s exchange within the next 12 to 18 months, according to a Hong Kong Economic Times report citing unidentified people.
The London Metal Exchange Index of industrial metals dropped 1.5 percent yesterday amid U.S. shutdown concern, while gold traded near the lowest in eight weeks today.
Material companies had the biggest drop among the Hang Seng Composite Index’s 11 industry groups. Aluminum Corp. of China slid 1.4 percent to HK$2.84. Jiangxi Copper Co., China’s biggest producer of the metal, sank 2.9 percent to HK$14.80. Gold miners Zhaojin Mining Industry Co. and Zijin Mining Group Co. each slumped at least 2.6 percent.
China’s Purchasing Managers’ Index was at 51.1 in September, the National Bureau of Statistics and China Federation of Logistics and Purchasing said yesterday. While the gauge rose from 51 in August and held above the level of 50 that indicates expansion, it missed the 51.6 median estimate in a Bloomberg News survey. A services index is due to be published tomorrow.
Futures on the Hang Seng Index (HSI) rose 0.4 percent to 22,975. The HSI Volatility Index dropped 1.1 percent to 16.76, indicating traders expect the benchmark equity index to swing 4.8 percent in the next 30 days.
“The Hong Kong market is consolidating, and in the near term it will remain that way,” said Calibre Asset’s Chan. “Markets are closed in China and are weak in the U.S., that’s not going to be too helpful for the Hong Kong stock market. It may need to correct a little bit more.”
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