Hong Kong stocks advanced, with the city’s benchmark capping its biggest gain in a week, after China’s trade data beat expectations.
Yanzhou Coal Mining Co., China’s fourth-largest producer of the fuel, jumped 4.3 percent after the nation’s coal exports rose. Cosco Pacific Ltd., the container-terminal arm of the largest mainland shipping group, advanced 2.3 percent. Chong Hing Bank Ltd., Hong Kong’s smallest listed family-run lender, surged 17 percent amid speculation it’s in talks with a buyer. China Rare Earth Holdings Ltd., based in the eastern province of Jiangsu, soared 14 percent after the government said it will crack down on illegal exploration of the element.
The Hang Seng Index gained 0.3 percent to 21,655.88 at the close, rebounding from the biggest drop in a month. About three stocks rose for each that slid, amid volume that was 44 percent below the 30-day average. The Hang Seng China Enterprises Index increased 0.4 percent to 9,484.64.
“The markets weren’t sure about the trade data but today it’s reflecting a fairly strong recovery,” said Teresa Chow, a fund manager at RBC Investment (Asia) Ltd., which oversees about $1.5 billion. “Sentiment is swinging on news flow from the U.S. and China.”
China’s exports and imports rebounded in July, adding to signs the economy is stabilizing after a two-quarter slowdown. Shipments abroad rose 5.1 percent from a year earlier, according to official data released today. That compares with the median estimate for a 2 percent gain in a Bloomberg survey and June’s 3.1 percent drop. Imports surged 10.9 percent. Cosco Pacific gained 2.3 percent to HK$10.78. China’s data on factory output and inflation are due tomorrow.
The Hang Seng Index retreated 4.4 percent this year, the biggest decline among major markets tracked by Bloomberg, amid concern on China’s growth and speculation the Federal Reserve will pare bond purchases. The gauge traded at 10.32 times estimated earnings, compared with 15.33 for the Standard & Poor’s 500 Index.
The Hang Seng China Enterprises Index of Chinese shares traded in Hong Kong, also known as the H-share index, has fallen as much as 27 percent in June from a Feb. 1 high, meeting some investors’ definition of a bear market.
Coal producers climbed after data showed mainland exports of the fuel rose to 820,000 tons in July, the highest this year. Yanzhou Coal jumped 4.3 percent to HK$5.59. China Shenhua Energy Co., the nation’s biggest coal miner by market value, advanced 1.6 percent to HK$22.
Materials and energy companies led declines this year through yesterday on the Hang Seng Composite Index on concern demand will weaken as China’s economy slows. Utility and information-technology shares were the biggest gainers.
Futures on the S&P 500 gained 0.2 percent after the benchmark gauge lost 0.4 percent yesterday, capping its first three-day drop since the period ending June 12. Fed Bank of Cleveland President Sandra Pianalto said yesterday there has been “meaningful improvement” in the U.S. labor market and that tapering of record stimulus may be warranted if employment continues to strengthen.
Chong Hing Bank surged 17 percent to HK$26.30, closing at a record high. Yue Xiu Group, a trading arm of China’s Guangzhou city government, is considering a bid for the bank, according to a person familiar with the matter who asked not to be identified because talks are confidential. Parent-company Liu Chong Hing Investment Ltd. soared 17 percent to HK$13.48.
China Rare Earth Holdings Ltd. surged 14 percent to HK$1.33. China has asked local governments to curb illegal exploration for rare-earth metals from Aug. 15 to Nov. 15, according to the Ministry of Industry & Information Technology.
China Unicom Hong Kong Ltd., the nation’s second-largest mobile carrier, gained 2.7 percent to HK$11.54 before being suspended from trading. First-half profit jumped 55 percent from a year earlier, according to a statement posted on China’s State-Owned Assets Supervision & Administration Commission website during trading hours.
Among stocks that fell, Hengdeli Holdings Ltd. slumped 1.5 percent to HK$1.98. The retail partner of Swatch Group AG said it expects first-half profit to drop due to impairment provisions.
Hang Seng Index futures increased 0.5 percent to 21,640. The HSI Volatility Index declined 5 percent to 16.39, indicating traders expect a swing of 4.7 percent for the equity benchmark in the next 30 days.
“The market is still lacking confidence,” said RBC’s Chow. “Market volatility will remain high for the remainder of the year.”