Hong Kong Stocks Fluctuate on Oil Producers, Airlines

Hong Kong stocks swung between gains and losses as oil producers advanced and airlines declined after escalating violence in Iraq drove up crude futures.

PetroChina Co., the nation’s largest oil and gas producer, rose 1.2 percent and Air China Ltd. dropped 1.3 percent amid higher fuel costs. China Minsheng Banking Corp. climbed 2.4 percent after saying it received central-bank approval to cut its reserve-requirement ratio. GCL-Poly Energy Holdings Ltd. (3800), the world’s biggest maker of polysilicon used in the solar industry, slipped 4.6 percent after BNP Paribas SA said installation of panels in China will slow.

The Hang Seng Index (HSI) was little changed at 23,323.72 at 1:26 p.m. in Hong Kong after falling as much as 0.4 percent. The Hang Seng China Enterprises Index, also known as the H-share index, added 0.4 percent to 10,560.10, reversing a 0.3 percent loss.

“Markets have reacted with movements in crude and in precious metals prices, some selling out of equities into bonds,” Toby Lawson, Sydney-based head of futures, options and cash equities trading for Asia Pacific at Newedge Group SA, said in a Bloomberg TV interview. “That’s pretty normal when you see some escalation of geopolitical shocks to markets.”

Futures on the Standard & Poor’s 500 Index fell 0.3 percent. U.S. stocks slid last week as lower estimates for global growth and the threat of civil war in Iraq halted a three-week rally that had sent equity indexes to all-time highs.

Oil Prices

West Texas Intermediate oil rose for a fourth day today as strife in Iraq threatened to disrupt supplies from OPEC’s second-largest producer. The nation said its army killed more than 279 rebels yesterday as the prospect of civil war in the Persian Gulf nation intensifies with Sunni Muslim insurgents controlling territory north of Baghdad. In Ukraine, tensions escalated at the weekend with 49 servicemen killed when pro-Russia fighters shot down a plane.

Hong Kong’s benchmark index has rebounded 10 percent since falling to an eight-month low in March, as China introduced stimulus including reserve-ratio cuts for some lenders to counter an economic slowdown. The equity gauge traded at 10.8 times estimated earnings at the last close, compared with 16.4 for the S&P 500.

Trading of New World Development Ltd., controlled by billionaire Cheng Yu-tung, and New World China Land Ltd. (917) were suspended ahead of a shareholders’ meeting to approve a proposal to take the China unit private.

Jewelry retailer King Fook Holdings Ltd. (280) jumped 30 percent to 96 Hong Kong cents after saying its controlling stakeholder was approached by potential investors.

To contact the reporter on this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net

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

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