Hong Kong stocks rose, with the benchmark index capping its biggest weekly gain since January, after jobless claims in the U.S. declined and companies from China Life Insurance Co. to Bank of China Ltd. reported higher profits.
China Life, the nation’s biggest insurer, and Bank of China, its fourth-largest lender, climbed at least 1.4 percent. Techtronic Industries Co., a power-tool maker that counts North America as its No. 1 market, gained 2 percent. BYD Co., the Chinese automaker partially owned by Warren Buffett’s Berkshire Hathaway Inc., jumped 12 percent after forecasting a surge in first-half profit.
The Hang Seng Index advanced 0.7 percent to 22,547.71 at the close, with about seven stocks climbing for every three that fell, in trading volume 6.8 percent greater than the 30-day intraday average. The gauge gained 2.4 percent for the week. The Hang Seng China Enterprises Index of mainland companies listed in the city advanced 0.6 percent to 10,834.08.
“We are optimistic about the U.S. recovery,” said Lewis Wan, Hong Kong-based chief investment officer at Pride Investments Group Ltd., which oversees about $300 million of assets. “We are quite optimistic about China’s growth in the second quarter to the end of this year.”
Gains this week helped trim to 6 percent the index’s decline from a Jan. 30 high, as slower-than-estimated inflation data in China has eased pressure on policy makers to tighten credit. Disappointing economic data from China and the outbreak of a new bird-flu virus dragged shares lower earlier in the month and made Hong Kong the worst performer among developed markets this year.
“Right now the inflation is good so the government can adopt a less-tightening policy on boosting the economy,” Wan said. “Hong Kong is a very good stepping stone for those who favor the China story.”
Mainland equity markets will be closed for the first three days of next week for public holidays, and Hong Kong will be closed May 1.
The Hang Seng Index traded yesterday at 10.7 times estimated earnings, compared with a five-year average of 12.7 and the Standard & Poor’s 500 Index’s multiple of 14.4, data compiled by Bloomberg show.
Futures on the Standard & Poor’s 500 Index slid 0.2 percent. The index rose 0.4 percent in New York yesterday, as earnings from United Parcel Services Inc. to Cliffs Natural Resources Inc. topped estimates and data showed applications for jobless benefits fell by 16,000 to 339,000 last week.
Techtronic gained 2 percent to HK$18.48, while Li & Fung Ltd., a supplier to Wal-Mart Stores Inc., rose 1 percent to HK$10.16.
A measure of financial companies had the biggest gain among the Hang Seng Index’s four industry groups. China Life gained 1.5 percent to HK$20.90 after its first-quarter profit surged 79 percent from a year earlier.
Bank of China advanced 1.4 percent to HK$3.58, the most actively traded stock in the Hang Seng Index by volume, and Bank of Communications Co., the nation’s fifth-largest lender, increased 0.8 percent to HK$6.08 after posting record quarterly profits as they boosted income from loans and fee-based services.
BYD surged 12 percent to HK$28.15 after saying first-half net income may soar to as much as 500 million yuan ($81 million), from 16.3 million yuan a year earlier. First-quarter profit jumped 316 percent to 112.4 million yuan as sales increased 9.8 percent to 12.9 billion yuan.
China Unicom Hong Kong Ltd., the nation’s second-largest mobile-phone company, climbed 2.6 percent to HK$11.08 after its first-quarter net income rose 89 percent from a year earlier.
Tingyi, Want Want
Tingyi (Cayman Islands) Holding Corp., a beverage maker, increased 3.2 percent to HK$21.20, snackmaker Want Want China Holdings Ltd. advanced 3 percent to HK$12.38 ahead of Golden Week holiday in China next week. They were the two biggest gains in the Hang Seng Index.
More than 35 of the 348 companies on the Hang Seng Composite Index are scheduled to release their earnings through next week, according to data compiled by Bloomberg.
Among stocks that fell, Yanzhou Coal Mining Co., China’s third-largest producer of the fuel by market value, slumped 6.2 percent to HK$8.44 after its first-quarter profit tumbled 78 percent from a year earlier.
Cosco Pacific Ltd., which operates a port in Greece, retreated 1.7 percent to HK$10.44 after its first-quarter profit sank 14 percent from a year earlier.
Hang Seng Index futures rose 0.6 percent to 22,556. The HSI Volatility Index gained 0.7 percent to 16.56, indicating traders expect a swing of 4.7 percent for the equity benchmark in the next 30 days.