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Hong Kong Stocks Cap Biggest Weekly Gain Since September

Hong Kong stocks rose, with the benchmark index capping its biggest weekly gain in five months, as materials and information technology shares climbed.

Tencent (700) Holdings Ltd., Asia’s largest Internet company by market value, rose to a record after Jefferies Hong Kong Ltd. boosted its target price. Zhaojin Mining Industry Co. (1818), China’s No. 2 gold producer, rose 6.5 percent as prices for the precious metal climbed to a three-month high. Melco Crown Entertainment Ltd. advanced 1.1 percent after the casino operator said it will begin paying dividends.

The Hang Seng Index gained 0.6 percent to 22,298.41 at the close in Hong Kong, capping a 3.1 percent gain this week, its biggest such advance since September. About three stocks climbed for each that fell on the 50-member gauge today amid volume 32 percent lower than the 30-day intraday average. The Hang Seng China Enterprises Index (HSCEI), also known as the H-share index, added 0.6 percent to 9,933.73.

“Investor sentiment is improving,” said Mari Oshidari, a Hong Kong-based strategist at Okasan Securities Group Inc. “People are starting to focus on the cheapness of Hong Kong stocks as external macro environment calmed down. Concerns about China’s growth remain, though a lot of that has been priced in by now.”

The Hang Seng Index dropped to 9.8 times reported earnings at the end of last week, the widest discount versus the MSCI World Index since May 2003, data compiled by Bloomberg show. The gauge is down 4.3 percent this year, the second-worst performer among 24 developed markets tracked by Bloomberg.

Hong Kong’s benchmark index entered a so-called correction last week, sliding at least 10 percent from its recent peak in December, as China’s official manufacturing index for January signaled a slowdown in the world’s second-largest economy. The H-share gauge is down 8.2 percent this year.

Tencent increased 1.6 percent to HK$548.50 after Jefferies boosted target price by 34 percent to HK$660. Semiconductor Manufacturing International Corp. rose 2.4 percent to 84 Hong Kong cents, while Kingsoft Corp., a software maker, advanced 0.8 percent to HK$24.30.

China today reported January consumer prices remained steady at a 2.5 percent rate from the month before, while producer prices fell 1.6 percent, in line with estimates. The nation is due to release January data on new yuan loans and money supply this week. China’s economic data are distorted in January and February by the shifting timing of the week-long Lunar New Year holiday, which began on Jan. 31 this year.

Futures on the Standard & Poor’s 500 Index fell 0.3 percent today. The gauge rose 0.6 percent yesterday as better-than-forecast earnings and a $45.2 billion takeover of Time Warner Cable Inc. outweighed the biggest drop in retail sales since June 2012. Jobless claims increased by 8,000 to 339,000 in the week ended Feb. 8.

Zhaojin Mining jumped 6.5 percent to HK$5.43, while China Gold International Resources Corp. rose 3.7 percent to HK$25.30. Bullion for immediate delivery rose as much as 0.6 percent today to the highest price since Nov. 8 as U.S. economic data that trailed estimates increased haven demand.

Melco Crown rose 1.1 percent to HK$110. The company said it will begin paying dividends after posting a gain in fourth-quarter earnings. Galaxy Entertainment Group Ltd. (27), the Macau casino operator controlled by billionaire Lui Che-woo, advanced 2.4 percent to HK$74.30.

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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