Hong Kong Stocks Rally on U.S. Data, China GDP Release

Jan. 18 (Bloomberg) -- Hong Kong stocks rose, with the city’s benchmark index closing at its highest since June 2011, as China’s economic growth accelerated for the first time in two years and fewer Americans applied for jobless benefits.

Great Wall Motor Company Ltd. led automakers higher, gaining 5.5 percent. Techtronic Industries Co., a manufacturer of power tools that counts North America as its biggest market, gained 3.2 percent. Trauson Holdings Co. gained 41 percent in Hong Kong after Stryker Corp. offered to buy the Chinese maker of orthopedic implants for $764 million.

The Hang Seng Index added percent 1.1 percent to 23,601.78 as of the 4 p.m. close in Hong Kong, taking its gain for the week to 1.5 percent. About six stocks rose for each that fell on the measure, with volume 12 percent above the 30-day average for the time of day, according to data compiled by Bloomberg. The Hang Seng China Enterprises Index of mainland companies gained 2.1 percent to 12,105.71.

“In both China and the U.S., we see improvement,” said Francis Lun, Hong-Kong based managing director at Lyncean Securities Ltd. “It’s grounds for optimism and grounds for the market to advance.”

Hong Kong’s benchmark index surged 23 percent last year as China’s economy showed signs of improvement and central banks around the globe added stimulus. Shares on the measure traded at 11.4 times estimated earnings yesterday, compared with 13.4 for the Standard & Poor’s 500 Index and 12.1 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.

China Growth

China’s gross domestic product rose 7.9 percent in the fourth quarter from a year earlier, the National Bureau of Statistics said in Beijing today. That compared with the 7.8 percent median estimate in a Bloomberg News survey and 7.4 percent in the previous period. Industrial output in December rose a more-than-expected 10.3 percent and fixed-asset investment for the year gained 20.6 percent.

A gauge of consumer goods companies was the biggest support to the Hang Seng Composite Index. None of the 11 industries on the city’s broadest equity-price measure decreased.

Great Wall gained 5.5 percent to HK$28.80. BYD Co., the Chinese carmaker partly owned by Warren Buffett’s Berkshire Hathaway Inc., rose 4.3 percent to HK$26.80. Guangzhou Automobile Group Co. added 1 percent to HK$7.25.

Li Ning Co., a sportswear company named after its Olympic gymnast founder, jumped 8.7 percent to HK$6.84. Gome Electrical Appliances Holding Ltd., a home appliance retailer, advanced 2.1 percent to 99 Hong Kong cents. Sany Heavy Equipment International Holdings Co., which makes mining equipment, added 5.3 percent to HK$4.14.

U.S. Futures

Futures on the S&P 500 were little changed today. The index added 0.6 percent in New York yesterday after U.S. housing starts rose to the fastest annual pace since 2008. Other reports showed fewer Americans applied for jobless benefits last week and manufacturing in the Philadelphia region unexpectedly contracted in January.

Exporters gained, with Techtronic rising 3.2 percent to HK$16.04. Li & Fung Ltd., a supplier to Wal-Mart Stores Inc., added 0.7 percent to HK$11.94, paring its decline for the week to 14 percent.

Trauson advanced 41 percent to HK$7.25 after Kalamazoo, Michigan-based Stryker offered to buy the maker of pelvic reconstruction plates used in trauma surgery. Orthopedic implant sales in China will almost double to $2.7 billion by 2015, vaulting the country past Japan as the biggest market after the U.S., according to Frost & Sullivan, a market research company.

The Hang Seng Volatility Index fell 4.7 percent to 14.14, indicating options traders expect a swing of 4.1 percent in the next 30 days. Futures on the Hang Seng Index rose 0.9 percent to 23,562.

To contact the reporter on this story: Eleni Himaras in Hong Kong at ehimaras@bloomberg.net

To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net