Hong Kong stocks gained after reopening from a holiday, rising a second day amid signs a deal will be reached to avoid breaching the U.S. debt limit and a possible default.
Techtronic Industries Co., a power-tool maker that relies on the U.S. for most its sales, advanced 4 percent. CSR Corp. jumped 5.3 percent on speculation Chinese railway companies will win contracts to build Thailand’s high-speed train system. Casino shares led by SJM Holdings Ltd. reached record highs after the growth outlook for Macau’s gaming market was raised at Macquarie Group Ltd..
The Hang Seng Index gained 0.5 percent to 23,336.52, its highest close since Sept. 23. About five shares climbed for every four that declined on the 50-member gauge on volume 25 percent lower than the 30-day average. The Hang Seng China Enterprises Index, also known as the H-share index, added 0.9 percent to 10,671.17.
“The market is now even stronger in its belief there will be resolution,” said Michael Liang, chief investment officer at Foundation Asset Management (HK) Ltd. “But once a resolution is reached, people will probably take profit. The politicians can play this game over and over again for a long time.”
The Hang Seng Index climbed 18 percent from this year’s low in June amid signs China’s growth is stabilizing. Hong Kong’s equity benchmark traded at 11.2 times estimated earnings, compared with 15.5 for the Standard & Poor’s 500 Index yesterday.
Futures on the U.S. equity gauge were little changed today after the measure rose 0.4 percent yesterday. A possible agreement between Democratic and Republican lawmakers would suspend the $16.7 trillion debt limit through Feb. 7 and fund the government until Jan. 15, according to a person familiar with the matter who spoke on condition of anonymity. A partial government shutdown began Oct. 1 and borrowing authority will lapse Oct. 17 unless a deal is reached.
Techtronic rose 4 percent to HK$20.55. Samson Holding Ltd., a furniture provider that gets most its revenue from the U.S., gained 2.9 percent to HK$1.07.
Railway shares climbed after Thai Prime Minister Yingluck Shinawatra said China had expressed interest in developing the Southeast Asian nation’s high-speed train system. CSR jumped 5.3 percent to HK$5.78. China Railway Construction Corp., builder of more than half the nation’s rail links since 1949, advanced 3.6 percent to HK$8.46.
Casino shares rallied, boosting a consumer-services gauge on the Hang Seng Composite Index, after Macquarie raised its growth estimates for Macau’s gaming market to 18 percent this year from a 13 percent estimate. SJM, Asia’s biggest casino operator, soared 6.7 percent to HK$24.05. Wynn Macau Ltd., a unit of billionaire Steve Wynn’s gaming company, jumped 4.6 percent to HK$29.70.
China releases gross domestic product data Oct. 18, with economists predicting 7.8 percent expansion in the three months to Sept. 30 from 7.5 percent in the previous period. The People’s Bank of China said yesterday new yuan loans topped estimates. Exports unexpectedly fell in September.
Futures on the Hang Seng Index rose 0.5 percent to 23,342. The Hang Seng Volatility Index gained 2.1 percent to 16.82, indicating traders expect the benchmark equity index to swing 4.8 percent in the next 30 days.