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Hong Kong Stocks Rise as China Policy Risk Eases on Inflation

April 15 (Bloomberg) -- Hong Kong’s stock index rose for a second day after China’s inflation climbed less-than-estimated and JPMorgan Chase & Co. reported earnings that beat analysts’ forecast.

Aluminum Corp. of China Ltd., the nation’s biggest maker of the lightweight metal, gained 2.6 percent. HSBC Holdings Plc, which made 20 percent of its 2009 revenue in North America, advanced 2.2 percent. Trading in Imagi International Holdings Ltd. was suspended after the maker of the “Astro Boy” animated movie soared 616 percent in the last four days.

The Hang Seng Index rose 0.2 percent to 22,157.82 at the close. Consumer prices rose a less-than-estimated 2.4 percent in March from a year earlier, today’s data showed.

“This set of macro data should not trigger near-term policy changes, particularly an interest rate hike,” Wendy Liu, head of China research at Royal Bank of Scotland Group Plc, said in an e-mail. The data signals there is “upside on cyclicals in the coming weeks, including cement, coal, transportation, energy, utilities. Banks may also benefit on the improving, but not yet overheating, macro backdrop. We’d be alert to signs of economic overheating and potential policy changes.”

The Hang Seng China Enterprises Index, which tracks the so-called H shares of Hong Kong-listed Chinese companies, fell 0.2 percent to 12,813.88.

Shares on the Hang Seng Index are priced at an average 14.7 times estimated earnings, down from 18.1 times on Nov. 16 when the index closed at its highest level for 2009, according to Bloomberg data. Concern budget deficits in Europe may derail the global recovery and speculation China’s government will tighten money supply have contributed to a 3.4 percent drop in the Hang Seng from its November high.

China Growth Data

China’s gross domestic product rose 11.9 percent in the first quarter from a year earlier, the statistics bureau said. That was more than the median 11.7 percent estimate in a Bloomberg News survey of 24 economists, and was the fastest pace in almost three years. Economists forecast a 2.6 percent inflation gain.

Aluminum Corp., known as Chalco, climbed 2.6 percent to HK$8.82. Cnooc Ltd., China’s biggest offshore energy explorer, rose 3.1 percent to HK$14.06. They were the two sharpest gainers on the Hang Seng Index. Air China Ltd., the nation’s largest international carrier, gained 5.1 percent to HK$8.03.

HSBC advanced 2.2 percent to HK$84.30. Techtronic Industries Co., the maker of Hoover vacuum-cleaners and Ryobi power tools, jumped 5.3 percent to HK$7.40.

U.S. Earnings

JPMorgan, the second-biggest U.S. bank by assets, said first-quarter earnings increased 55 percent to $3.33 billion, or 74 cents a share, beating the average estimate of 64 cents per share projected by 21 analysts surveyed by Bloomberg.

Intel Corp., the world’s No. 1 chipmaker, forecast sales will rise this quarter after a 44 percent gain in the first three months.

China Coal Energy Co. climbed 2.2 percent to HK$13.04 after the nation’s second-largest coal producer said it posted a 53 percent increase in raw coal output in March.

Orient Overseas International Ltd. rose 3.2 percent to HK$62.55 after Hong Kong’s biggest container line said first-quarter revenue increased 19 percent to $1.13 billion as volume gained.

Trading in Imagi, a maker of computer-generated movies, was suspended, pending a price-sensitive statement, according to a filing to the Hong Kong stock exchange.

China Developers Fall

China Overseas Land & Investment Ltd., a Hong Kong-traded builder controlled by the Chinese construction ministry, declined 1.7 percent to HK$16.28. China Resources Land Ltd., a state-controlled property developer, slid 0.9 percent to HK$15.92.

Chinese developers fell after the Shanghai Securities News reported China plans to accelerate the introduction of policies aimed at curbing property price gains, citing an unidentified industry official. China may also tighten mortgage requirements for purchases of more than one home, the newspaper reported.

Futures on the Hang Seng Index rose 0.3 percent to 22,198. Thirty stocks dropped among the measure’s 43 constituents while 12 advanced.

To contact the reporter on this story: Hanny Wan in Hong Kong at hwan3@bloomberg.net

To contact the editor responsible for this story: Darren Boey at dboey@bloomberg.net

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