Hong Kong stocks rose, with the benchmark index advancing a third day, as technology shares followed a rally in the U.S. and investors awaited Chinese factory data tomorrow amid concerns of economic slowdown.
The Hang Seng Index gained 0.5 percent to 21,962.79 as of 9:32 a.m. in Hong Kong, with more than three shares rising for each that fell. The Hang Seng China Enterprises Index (HSCEI), also known as the H-share index, added 0.3 percent to 9,710.59. Chinese President Xi Jinping said the nation needs to adapt to a “new normal” in the pace of growth.
The Hang Seng Index fell 6.2 percent this year through last week and the H-share gauge sank 10 percent as manufacturing to inflation data added to signs China’s economic momentum is ebbing. A report on retail sales is also due tomorrow. The Hang Seng Index (HSI) traded at 10.2 times estimated earnings at its last close, compared with 15.9 for the Standard & Poor’s 500 Index.
Xi said China needs to remain “cool-minded” amid what analysts forecast will be the weakest gross-domestic product expansion since 1990. The nation’s growth fundamentals haven’t changed and the country is still in a “significant period of strategic opportunity,” Xi said, according to a Xinhua News Agency report on May 10.
China’s State Council said it will deepen reforms to improve the quality of and access to the nation’s stock, bond and commodities markets. The government will relax limits on foreign investment in listed companies, expand the quotas for capital flow, and develop commodities trading tools, the State Council said in a statement posted on the central government’s website at the end of last week.
The International Monetary Fund, which currently expects growth matching the government’s target of 7.5 percent this year, may lower its forecast, according to Changyong Rhee, director of the fund’s Asia and Pacific division.
Futures on the S&P 500 added 0.2 percent today. The U.S. equity benchmark climbed 0.2 percent on May 9 and the Dow Jones Industrial Average reached a record as Internet shares rebounded after a three-day selloff and Gap Inc. led retailers higher.
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