Hong Kong stocks rose, with the Hang Seng closing at its highest in a month, on strong earnings as Bank of Communications Ltd. led lenders higher after beating estimates and China Coal Energy Company Ltd.’s profit increased.
Bank of Communications advanced 3.6 percent. China Coal, a unit of the mainland’s leading producer of the fuel, gained 4 percent. Gome Electrical Appliances Holding Ltd., China’s second-biggest electronics retailer, fell to the lowest level in almost three years amid slowing economic growth and concern an end to subsidies will affect earnings.
The Hang Seng Index rose 1.7 percent to 21,094.21 at the close in Hong Kong, the highest since March 19. Volume was 8.8 percent below the 30-day intraday average. The Hang Seng China Enterprises Index of mainland stocks advanced 1.6 percent to 11,081.
“At the company level, the reporting season has been quite good,” said Tim Schroeders, who helps manage about $1 billion in equities at Pengana Capital Ltd. in Melbourne. “This is helping markets.”
Hong Kong’s benchmark index has climbed 14 percent this year. Shares on the gauge traded at 10.6 times estimated earnings, compared with a multiple of 13.4 on the Standard & Poor’s 500 Index and 10.9 times on the Stoxx Europe 600 Index, according to data compiled by Bloomberg.
Futures on the Standard & Poor’s 500 Index were little changed today at 1,396.75. The gauge advanced 0.2 percent in New York on April 27, capping its best weekly rally since March.
Of the 67 companies on the Hang Seng Composite Index that reported quarterly earnings since April 10, 13 exceeded expectations, while 26 missed analysts’ estimates, according to data compiled by Bloomberg News.
Banking Stocks Climb
Bank of Communications advanced 3.6 percent to HK$6, the most since February, after it reported 15.9 billion yuan ($2.5 billion) in first-quarter net income, beating analysts’ estimates for a 15.5 billion yuan gain. The stock also rose after being raised to “outperform” by Keefe, Bruyette & Woods.
Agricultural Bank of China Ltd., the world’s sixth-biggest lender by market value, added 1.9 percent to HK$3.69 after its 43.5 billion yuan profit exceeded expectations on a 22 percent jump in net interest income.
China Coal rallied 4 percent to HK$8.91 after profit rose 15 percent to 3 billion yuan in the first quarter, up from 2.6 billion yuan in the year-earlier period.
Among stocks that declined, Gome slid 5.4 percent to HK$1.40 after a state program that gave shoppers as much as 400 yuan to buy appliances expired.
Gome competitor Suning Appliance Co. reported a 15 percent drop in first-quarter net income last week. China, the world’s second-largest economy, pared the nation’s economic growth target to 7.5 percent from an 8 percent goal in place since 2005.
“The heavy selling reflects investors’ concerns over an economic slowdown,” said Andrew Sullivan, principal trader at Piper Jaffray. “We’ve seen a warning as its major rival reported disappointing first-quarter earnings last week, and generally no one is buying into white goods companies at the moment.”
Futures on the Hang Seng Index expiring this month gained 1.9 percent to 20,940. The HSI Volatility Index fell 0.1 percent to 18.98, indicating options traders expect a swing of about 5.4 percent on the benchmark index during the next 30 days.