May 2 (Bloomberg) -- Hong Kong stocks rose for a second day, driving the benchmark index to an almost seven-week high, as an increase in a Chinese manufacturing gauge added to signs the mainland economy will avoid a deeper slowdown.
Cnooc Ltd., China’s largest offshore oil producer, gained 1.5 percent. Ping An Insurance (Group) Co., China’s No. 2 insurer, rose 2.2 percent after reporting a profit increase. Hong Kong Exchanges & Clearing Ltd., Asia’s biggest bourse operator, advanced 1.1 percent as it studied a bid for the London Metal Exchange to build up a commodity business.
The Hang Seng Index added 1 percent to 21,309.08 at the 4 p.m. close in Hong Kong, the highest level since March 16. More than four stocks rose for each that fell. Trading volume on the index was 6 percent above the 30-day average after the market was closed yesterday for a public holiday. The Hang Seng China Enterprises Index of mainland companies listed in Hong Kong advanced 0.6 percent to 11,145.96.
“I’m not that worried about growth in China,” said Masahiko Ejiri, a senior fund manager in Tokyo at Mizuho Asset Management Co., which oversees $39 billion. “The trend is improving. We are quite positive about the Chinese economy and the prospects for the equity market. There will be more enthusiasm coming for the second half of the year.”
Hong Kong’s benchmark index has risen 16 percent this year amid optimism that Chinese authorities will take steps to avoid an abrupt slowdown in the economy and that the U.S. will weather the European debt crisis. The index traded at 10.6 times estimated earnings as of yesterday, compared with 13.4 times for the Standard and Poor’s 500 Index and 10.8 times for the Stoxx Europe 600 Index.
Hong Kong shares advanced after a private report showed today that the HSBC Manufacturing Purchasing Managers’ Index gained to 49.3 last month from 48.3 in March. The Purchasing Managers’ Index rose to 53.3 in April from 53.1 in March, China’s statistics bureau and logistics federation said yesterday. That’s the highest level since March 2011.
“Soft landing provides confidence for equity investors who had been worried about hard landing in China,” said Shane Oliver, Sydney-based head of investment strategy at AMP Capital Investors Ltd., which has almost $100 billion under management. “The news out of China is very good and shows the global recovery is continuing.”
Stocks also advanced after the U.S. Institute for Supply Management’s factory index unexpectedly climbed to 54.8 last month, the best reading since June, a report showed yesterday. Li & Fung Ltd., a supplier of toys and clothes to Wal-Mart Stores Inc., rose 2.2 percent to HK$16.96.
Cnooc advanced 1.4 percent to HK$16.78. Ping An Insurance added 2.2 percent to HK$66.30 after saying on April 27 that first-quarter profit climbed 4.3 percent to 6.06 billion yuan ($961 million) on increased premiums and interest revenue.
China Coal Energy Co. advanced 1.4 percent to HK$9.03 after saying first-quarter net income rose 15 percent to 2.6 billion yuan. Bank of Communications Co. gained 0.7 percent to HK$6.04 after posting first-quarter net income of 15.9 billion yuan. Analysts had estimated profit of 15.3 billion yuan.
Hong Kong Exchange & Clearing climbed 1.1 percent to HK$125.50 after it said on April 30 that it was “one of a number of interested parties” studying the opportunity to buy the London Metal Exchange, the world’s largest metals trading platform.
Hang Seng Index futures expiring this month rose 1.2 percent to 21,183. The HSI Volatility Index fell 1.3 percent to 18.73, indicating traders expect a swing of about 5.4 percent in the benchmark index during the next 30 days.
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