Hong Kong Stocks Rise on China Data; China Unicom Surges

Hong Kong stocks rose, with the benchmark index capping a two-day gain, after a gauge of China’s services industries jumped to its highest since March. China Unicom (762) (Hong Kong) Ltd. surged on report fees for calls to other networks will be cut.

China Unicom, the nation’s second-largest mobile carrier, led the Hang Seng Index higher. Gaming shares extended gains after Macau’s casino revenue in September jumped. Zhaojin Mining (1818) Industry Co., China’s No. 2 gold producer, added 1.6 percent as the precious metal rose the most in two weeks on speculation the U.S. government shutdown may delay tapering of record stimulus. Cnooc Ltd. (883), China’s biggest offshore oil explorer, climbed 2.2 percent after crude prices jumped yesterday.

The Hang Seng Index added 1 percent to 23,214.40 at the close in Hong Kong, its first back-to-back gain in more than three weeks. About three shares rose for each that fell on the 50-member gauge, with volume 30 percent lower than the 30-day intraday average. The Hang Seng China Enterprises Index (HSCEI), also known as the H-share index, climbed 1.8 percent to 10,514.55. Mainland markets are shut until Oct. 8.

“Investor sentiment is holding well,” said Benjamin Tam, a Hong Kong-based portfolio manager at IG Investment Ltd., which oversees about $1.5 billion. “People are still optimistic about China’s economy. Having said that, we are waiting on results of fiscal talks in the U.S., which is the biggest uncertainty.”

The Hang Seng Index climbed 9.9 percent in the three months through September, its steepest quarterly gain since the period ended March 2012, after the Federal Reserve unexpectedly refrained from cutting stimulus and data added to evidence China’s economy is strengthening. Hong Kong’s equity benchmark traded at 11.12 times estimated earnings today, compared with 15.3 for the Standard & Poor’s 500 Index.

China Services

China’s non-manufacturing Purchasing Managers’ Index rose to 55.4 last month from 53.9 in August, the National Bureau of Statistics and the Federation of Logistics & Purchasing said today. Readings above 50 indicate expansion. A report due after the close of trading today is expected to show Hong Kong’s retail sales accelerated.

China Unicom jumped 8.4 percent to HK$13.12, leading gains on the Hang Seng Index. China Telecom Corp. increased 7.6 percent to HK$4.12. Interconnection fees for calls from the companies’ networks to China Mobile Ltd. (941) may be halved to 0.03 yuan per minute, Economy & Nation Weekly reported today, citing an unidentified person. China Mobile slumped 0.7 percent to HK$86.50, the biggest drop on the Hang Seng Index.

Casinos Climb

Data from Macau’s Gaming Bureau showed casino revenue jumped 21 percent in September from a year earlier. Gaming shares also climbed after visitors to Macau on Oct. 1-2 rose 14 percent amid National Day celebrations.

Sands China Ltd. (1928), a unit of billionaire Sheldon Adelson’s Las Vegas casino company, gained 3.9 percent to HK$50.60. Galaxy Entertainment Group Ltd., the casino operator controlled by billionaire Lui Che-woo, advanced 5.1 percent to HK$58.70.

Energy companies climbed after West Texas Intermediate oil for November delivery jumped to a two-week high. Cnooc rose 2.2 percent to HK$15.98. PetroChina Co., the nation’s No. 1 energy producer, advanced 1.4 percent to HK$8.64.

Futures on the S&P 500 slipped 0.2 percent today. The index fell 0.1 percent yesterday as the U.S. government faced a second day of partial shutdown after lawmakers failed to agree on a federal budget. Shares pared losses after President Barack Obama summoned Congressional leaders for the first high-level talks on reopening the government and raising the debt ceiling. A one-week shutdown would shave 0.1 of a percentage point from economic growth, according to a Bloomberg survey.

U.S. Jobs

A private report yesterday showed U.S. companies added fewer workers than projected in September, indicating the U.S. job market is struggling to gain momentum. The 166,000 increase in employment compared with the median forecast of 180,000.

Investors have been scrutinizing whether U.S. growth is robust enough for the Fed to begin curtailing $85 billion in monthly bond purchases. The shutdown may delay a full assessment of economic performance, Fed Boston President Eric Rosengren said.

Gold futures for December delivery rose 2.7 percent yesterday in New York. Zhaojin Mining added 1.6 percent to HK$6.83. Zijin Mining Group Co., China’s largest gold miner, gained 2.2 percent to HK$1.83.

Henderson Land Development Co. (12), a Hong Kong builder controlled by billionaire Lee Shau-kee, slid 0.3 percent to HK$48.45, after rising as much as 1.9 percent. The company agreed to pay Lee and trusts belonging to his family HK$2.96 billion ($382 million) for shares in companies including Hong Kong & China Gas Co, which slid 0.3 percent to HK$18.66.

Evergrande Real Estate Group Ltd. (3333), China’s biggest developer by revenue, added 2.8 percent to HK$3.30 after proposing a 2012 dividend of 0.1429 yuan a share.

Dairy Support

Milk companies surged. Biostime International Holdings Ltd. (1112) gained 5.4 percent to HK$63.75, while China Modern Dairy Holdings Ltd. (1117) rose 7.8 percent to HK$3.31. Both stocks closed at record highs on speculation milk producers will receive government support. China Mengniu climbed 3 percent to HK$36.05.

Futures on the Hang Seng Index (HSI) rose 0.9 percent to 23,180. The HSI Volatility Index dropped 1.6 percent to 16.50, indicating traders expect the benchmark equity index to swing 4.7 percent in the next 30 days.

To contact the reporter on this story: Kana Nishizawa in Hong Kong at knishizawa5@bloomberg.net

To contact the editor responsible for this story: Sarah McDonald at smcdonald23@bloomberg.net

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