Hong Kong stocks advanced, with the benchmark index rising for the first time in three days, as retailers gained after mainland markets reopened from holidays. Shares of Country Garden (2007) Holdings Co. surged.
Belle International Holdings Ltd., China’s biggest seller of footwear, led gains on the Hang Seng Index. Country Garden jumped 8 percent after the mainland developer said it met its annual contract sales target. Yue Yuen Industrial (Holdings) Ltd. (551), a shoe manufacturer that gets about 29 percent of revenue from the U.S., slipped 1.4 percent on concern the impasse over the U.S. debt limit might lead to a default.
The Hang Seng Index climbed 0.9 percent to 23,178.85 at the close in Hong Kong, erasing losses of as much as 0.2 percent. More than four shares rose for each that fell on the 50-member gauge. The Hang Seng China Enterprises Index (HSCEI), also known as the H-share index, advanced 1 percent to 10,534.94 after falling as much as 0.5 percent.
“Retail sales in China have been good during the week-long National Day holiday, boosting confidence in the economy,” said Castor Pang, head of research at Core Pacific-Yamaichi International Hong Kong Ltd. “Valuations still look attractive.”
China’s retail and catering combined sales grew 14 percent during the holiday from a year earlier to 870 billion yuan ($142 billion), according to a statement posted on the website of the Commerce Ministry. The Hang Seng Index gained 2.3 percent this year. Hong Kong’s benchmark equity gauge traded at 11.1 times estimated earnings, compared with 15.1 for the Standard & Poor’s 500 Index.
Belle jumped 5 percent to HK$11.72. Luk Fook Holdings International Ltd., a jewelry seller based in Hong Kong, rose 2.9 percent to HK$25.30 after Chief Executive Officer Wong Wai Sheung said year-on-year sales growth during the seven-day Chinese national holiday was in the low double-digits.
Country Garden jumped 8 percent to a five-year high of HK$5.55. The company had contracted sales of 64.7 billion yuan by the end of September, compared with its 62 billion yuan target for the year. Other mainland developers rose after China Securities Journal reported home sales in Beijing and Shanghai from Oct. 1 to 6 almost doubled from a year earlier. Guangzhou R&F Properties Co. surged 9.2 percent to HK$13.60.
Futures on the S&P 500 climbed 0.1 percent today after the U.S. equity gauge lost 0.9 percent yesterday. U.S. President Barack Obama reiterated that he won’t negotiate with Republicans over the debt limit and government shutdown. With borrowing authority set to expire Oct. 17, Democratic lawmakers are working on a strategy to allow Obama to raise the $16.7 trillion debt ceiling without requiring Republicans to vote in favor of an increase.
Yue Yuen slumped 1.4 percent to HK$21.45. Li & Fung Ltd. (494), which supplies clothing and toys to retailers including Wal-Mart Stores Inc., retreated 1.8 percent to HK$11.
HSBC Holdings Plc’s and Markit Economics’ purchasing managers’ index for China’s service industries fell to 52.4 in September from 52.8 in August, according to a report today. A reading above 50 indicates expansion. The official non-manufacturing gauge for September released last week rose to its highest since March.
Futures on the Hang Seng Index (HSI) climbed 1.1 percent to 23,163. The HSI Volatility Index slid 3.9 percent to 17.59, indicating traders expect the benchmark equity index to swing 5 percent in the next 30 days.
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