China Petroleum & Chemical Corp., also known as Sinopec, surged 4.3 percent to lead the advance after earnings beat estimates and gas-distributor ENN Energy Holdings Ltd. announced greater cooperation with Asia’s biggest refiner. Gome Electrical Appliances Holding Ltd. climbed 3 percent on surging first-half profit. K Wah International Holdings Ltd. dropped 2.3 percent as net income at the developer plunged.
The Hang Seng Index gained 0.2 percent to 25,166.91, extending a six-year high. The measure has advanced 19 percent from its March low amid optimism about a stock-trading link with Shanghai. The Hang Seng China Enterprises Index, also known as the H-share index, added 0.5 percent today to 11,115.79.
“There’s still a lot of bullishness for Hong Kong shares in the short term,” Ryan Huang, a strategist at IG Ltd. in Hong Kong, said by phone. “Valuations still look pretty good. The Shanghai-Hong Kong connect is another positive catalyst.”
Hong Kong Exchanges & Clearing Ltd. said a test for an equity link with Shanghai ran smoothly over the weekend. A total of 96 exchange participants, making up 80 percent of market turnover, took part. Further rehearsals are planned for next weekend and Sept. 13, with cross-border trading expected to begin in October.
Investors are weighing whether the rally will continue after China data from factory activity to credit growth missed estimates, putting pressure on policy makers to boost stimulus. The Hang Seng Index (HSI) traded at 11.6 times estimated earnings at the close, compared with 7.7 for the H-share gauge and 16.8 on the Standard & Poor’s 500 Index as of last week.
Sinopec jumped 4.3 percent to HK$8.04 after saying net income increased 7.5 percent to 32.5 billion yuan ($5.3 billion), beating the average estimate of 30 billion yuan by six analysts tracked by Bloomberg. ENN said it had reached an accord with the company in areas including buying and transporting natural gas. This comes ahead of Sinopec seeking private investment in China’s largest fuel station network.
Gome Electrical Appliances climbed 3 percent to HK$1.36 after reporting first-half profit doubled to 693 million yuan from 322 million yuan a year ago.
Xinjiang Goldwind Science & Technology Co. surged 28 percent to HK$12.10. China’s biggest wind-turbine maker said first-half profit more than tripled as it increased margins and won orders for new wind farms.
Among shares that fell, K Wah International slipped 2.3 percent to HK$5.20. The company posted a 76 percent plunge to HK$213.8 million in first-half net income from a year earlier.
China Resources Gas Group Ltd. (1193) tumbled 9.3 percent to HK$23.50 after Jefferies Group LLC and CCB International Securities Ltd. downgraded their ratings on the company after it lowered its production output for next year.
Futures on the S&P 500 rose 0.4 percent after resuming trading. CME Group Inc., the world’s largest futures market, had earlier halted all of its Globex electronic-trading markets except for Malaysian equity-index derivatives.
The U.S. equity benchmark fell from a record on Aug. 22 after Federal Reserve Chair Janet Yellen spoke at a symposium of global central bankers at Jackson Hole, Wyoming, saying the U.S. workforce has yet to recover. She also acknowledged the need for flexibility, saying a rate increase could come sooner than expected depending on economic progress.
European Central Bank President Mario Draghi said it will use all available instruments to “ensure price stability over the medium term.” Bank of Japan Governor Haruhiko Kuroda acknowledged he may be forced to deploy fresh stimulus.
Premier Li Keqiang says China faces challenges maintaining medium- to high-speed growth, and urged railway companies to draw private capital to fund construction of more lines in the nation’s central and western regions.
China will gradually relax restrictions on opening securities accounts and allow individuals to have more than one account, Securities Times reported, citing China Securities Depository and Clearing Corp.
To contact the reporter on this story: Jonathan Burgos in Singapore at email@example.com