Hong Kong stocks rose for a second day, with the city’s benchmark index posting its biggest gain in two months, as U.S. economic data bolstered confidence in the global recovery and companies including Sino Land Co. and New World Development Co. beat profit estimates.
Sino Land rose 3.4 percent, while New World Development increased 3.8 percent. China Coal Energy Co., the country’s second-biggest producer of the fuel, climbed 5.1 percent to lead resource shares higher. MGM China Holdings Ltd. gained 1.4 percent after the casino operator said business from VIP gamblers picked up after the Lunar New Year holiday.
The Hang Seng Index climbed 2 percent to 23,020.27 as of the 4 p.m. close in Hong Kong, its steepest gain since Jan. 2. More than 11 stocks gained for each that fell on the 50-member gauge. The measure dropped 3 percent this month, with just nine companies gaining. The Hang Seng China Enterprises Index added 2.6 percent to 11,437.17.
“The sharp rebound in the U.S. market” is pulling Hong Kong shares higher today, said Steven Leung, Hong Kong-based institutional sales director at UOB Kay Hian Ltd. Whether the rally will continue “depends on what China’s government is going to say over the weekend,” at the annual National People’s Congress on March 5 that will set this year’s growth target.
Shares fell this month after the city’s government introduced additional property curbs and on concern the U.S. will rein in stimulus while China signaled it may take steps to cool the housing market. Shares on the benchmark Hang Seng Index traded at 11.1 times average estimated earnings yesterday, compared with 13.7 for the Standard & Poor’s 500 Index and 12.3 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.
Futures on the S&P 500 Index rose 0.2 percent. The gauge gained 1.3 percent yesterday and the Dow Jones Industrial Average advanced to the highest level in five years as Federal Reserve Chairman Ben S. Bernanke said yesterday recent increases in some interest rates may signal the U.S. economy is gaining strength.
Shares also climbed after orders for U.S. durable goods excluding transportation gear climbed in January by the most in a year, while pending home sales increased more than forecast.
Sino Land gained 3.4 percent to HK$14.10 after reporting first-half underlying profit rose 81 percent to HK$4.49 billion ($579 million), exceeding the HK$3.9 billion median estimate of five analysts compiled by Bloomberg.
New World Development, the Hong Kong builder controlled by billionaire Cheng Yu-tung, rose 3.8 to HK$14.28 after saying underlying profit jumped 45 percent to HK$4.1 billion. That compares with the HK$3.26 billion median estimate of four analysts compiled by Bloomberg.
Chinese developers also advanced. Country Garden Holdings Co., based in China’s southern province of Guangdong, jumped 5.3 percent to HK$3.98, Evergrande Real Estate Group Ltd. climbed 4.6 percent to HK$3.83 and China Overseas Grand Oceans Group Ltd. gained 1.3 percent to HK$10.90. The stocks gained after being raised to overweight at Barclays Plc.
Resource stocks gained. China Coal climbed 5.1 percent to HK$7.69. Jiangxi Copper Co., the nation’s largest producer of the metal, added 0.9 percent to HK$18.58. Aluminum Corp. of China Ltd., the biggest supplier of the light metal, increased 1.5 percent to HK$3.35.
MGM China, the Macau casino venture between a daughter of gambling mogul Stanley Ho and MGM Resorts International, rose 1.4 percent to HK$18.74. Business from high-stakes gamblers has seen a “strong comeback” after the Lunar New Year festival ended on Feb. 17, Bill Hornbuckle, chief marketing officer of MGM Resorts, told reporters in Macau yesterday.
Hang Seng Index futures rose 2.3 percent to 22,972. The HSI Volatility Index slumped 11 percent to 15.19, its biggest drop since June 18, indicating traders expect a swing of 4.4 percent for the equity benchmark in the next 30 days.