Hong Kong Stocks Swing as Developers Drop, Solars Advance

Hong Kong stocks swung between gains and losses as developers declined and solar shares advanced as investors awaited the Federal Reserve’s policy decision today.

The Hang Seng Index (HSI) rose 0.1 percent to 21,609.34 as of 9:34 a.m. in Hong Kong after falling as much as 0.1 percent. The Hang Seng China Enterprises Index (HSCEI), also known as the H-share index, added 0.1 percent to 9,354.57.

Data yesterday showed new home-price growth slowed last month, amid tighter credit to rein in excessive borrowing and property curbs. Closely held developer Zhejiang Xingrun Real Estate Co. was this week said to have collapsed with $567 million of debt, adding to concern of strains in the nation’s real estate sector and financial system. This comes after Shanghai Chaori Solar Energy Science & Technology Co. failed to repay its debt, the first onshore corporate-bond default.

The H-share measure is down 14 percent this year through yesterday as Chinese data from industrial production and slumping exports signaled a slowdown in the world’s second-largest economy. The measure traded at 6.3 times estimated earnings yesterday, compared with 9.8 for the Hang Seng Index and 15.9 for the Standard & Poor’s 500 Index.

Futures on the S&P 500 (SPX) were little changed. The gauge advanced 0.7 percent yesterday. A Commerce Department report showed housing starts were little changed in February after declining less than previously estimated a month earlier, indicating the industry is stabilizing after bad winter weather curbed construction.

Stimulus Outlook

The Fed Open Market Committee will further scale back its bond-buying program at its two-day meeting that ends today, reducing purchases for the third time by $10 billion to a $55 billion monthly rate, according to the median estimate of 54 economists surveyed by Bloomberg from March 14-17.

Fed officials have said they will probably hold the central bank’s target interest rate near zero “well past the time” that unemployment falls below 6.5 percent, “especially if projected inflation” remains below its longer-run goal of 2 percent.

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

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

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