Hong Kong’s Hang Seng Index of stocks rose for a second day as improving economic reports and speculation Europe’s debt crisis will be contained boosted confidence in a global recovery.
Yue Yuen Industrial (Holdings) Ltd., the world’s largest supplier of branded athletic and casual shoes, climbed 1.1 percent. Techtronic Industries Co., maker of Hoover vacuum cleaners and Ryobi power tools, advanced 1.4 percent. Cnooc Ltd., China’s biggest offshore oil producer, increased 3.2 percent after commodity prices rose. Huaneng Power International Inc., China’s No. 2 electricity producer, surged 6.8 percent after China ordered a freeze in power-coal prices.
“Market sentiment has turned to bullish from bearish because of the positive economic data,” said Francis Lun, general manager at Fulbright Securities Ltd. in Hong Kong. “People aren’t worrying about recession now. Market confidence is likely to continue for the rest of the year.”
The Hang Seng Index rose 0.9 percent to 23,448.78 at the close, its highest close since Nov. 22. The Hang Seng China Enterprises Index of so-called H shares of Chinese companies gained 1.1 percent to 13,087.40.
Yue Yuen, the shoemaker that gets about half of sales from the U.S. and Europe, rose 1.1 percent to HK$28.75. Techtronic Industries climbed 1.4 percent to HK$8.61. Cosco Pacific Ltd., which operates container facilities at Greece’s Piraeus port, advanced 4.9 percent to HK$12.94, the biggest gain in the Hang Seng Index.
In the U.S., an ADP Employer Services report showed employers added 93,000 workers in November, more than the 70,000 median forecast of economists surveyed by Bloomberg. Separately, the Institute for Supply Management said its factory index, a gauge of manufacturing, held near a five-month high.
The Federal Reserve said the economy gained strength across much of the U.S. as hiring improved, manufacturing expanded and retailers anticipated a stronger holiday shopping season.
European Central Bank President Jean-Claude Trichet said policy makers must assert authority to fight “demanding” market conditions in Europe, and that investors are underestimating policy makers’ determination to halt the region’s debt crisis.
Manufacturing industries in Europe expanded at the fastest pace in four months in November, led by Germany, the zone’s largest economy, London-based Markit Economics said yesterday.
Oil and metal producers gained as the economic reports raised optimism commodity demand will increase. Cnooc climbed 3.2 percent to HK$17.54, and PetroChina Co., the country’s biggest oil company, increased 2.4 percent to HK$9.97. China Petroleum & Chemical Corp. advanced 1.5 percent to HK$7.39.
Crude oil for January delivery jumped 3.1 percent to $86.75 a barrel in New York yesterday, the highest settlement price since Nov. 11, while the London Metal Exchange Index of prices for six industrial metals including copper and aluminum climbed 2.6 percent.
Jiangxi Copper Co., China’s No. 1 producer of the metal, jumped 3.7 percent to HK$24.05, while Zhaojin Mining Industry Co., a miner based in China’s Shandong province, climbed 4.4 percent to HK$30.75. Aluminum Corp. of China Ltd., the country’s No. 1 producer of the metal, gained 1.4 percent to HK$7.11
A report yesterday showed China’s manufacturing expanded at the fastest pace in seven months in November, indicating the economy can withstand higher interest rates as price pressures escalate.
The Hang Seng Index gained 6.3 percent this year through yesterday as economic reports and company earnings eased concern China’s monetary tightening measures and Europe’s debt will slow global growth. Shares in the gauge trade at an average 14.8 times estimated earnings, compared with about 17.2 times at the start of the year.
Chinese power producers rose after the state-run Xinhua News Agency said the government ordered a freeze in 2011 contract prices for coal used in power stations. Huaneng Power International surged 6.8 percent to HK$4.42, while Datang International Power Generation Co., China’s biggest electricity producer, jumped 6.8 percent to HK$2.99. China Resources Power Holdings Co., the Hong Kong-listed mainland electricity producer, climbed 4.3 percent to HK$14.42.
Power-station coal prices under term contracts must be unchanged from 2010 levels, Xinhua reported yesterday, citing Cao Changqing, head of pricing at the National Development and Reform Commission. “Any form of price increase is not allowed,” Cao was quoted as saying.
Three stocks rose for each that fell on the 45-member Hang Seng Index. Futures on the gauge gained 0.7 percent to 23,415.