Hong Kong stocks rose, with the benchmark index capping a two-week advance, after data today showed China’s growth accelerated. Sands China Ltd. reached a record high after the casino operator’s profit surged.
Zijin Mining Group Co., China’s largest gold miner, added 2.8 percent as prices for the precious metal jumped on expectations the Federal Reserve will maintain stimulus in the wake of the U.S. budget showdown. AIA Group Ltd., the second-largest Asia-based insurer by market value, rose to a record high as the value of its new business rose. Sands China added 9.2 percent to lead gains.
The Hang Seng Index increased 1.1 percent to 23,340.10 at the close in Hong Kong, adding 0.5 percent this week. More than twice as many shares climbed as declined on the 50-member gauge, with volume 18 percent below the 30-day average. The Hang Seng China Enterprises Index, also known as the H-share index, rose 0.7 percent to 10,644.04.
“China’s data confirms the economy is gaining momentum,” said Louis Wong, a fund manager at Phillip Securities HK Ltd. “The U.S. government shutdown led the market to believe Fed tapering would be further delayed, which is good for equities.”
China’s gross domestic product expanded 7.8 percent in the third quarter from a year earlier, the National Bureau of Statistics said in Beijing today, meeting economists’ estimates. Other data showed September industrial production rose 10.2 percent from a year earlier, while retail sales climbed 13.3 percent.
Weichai Power Co. led gains on the H-share index, jumping 8.1 percent to HK$33.45. JPMorgan Chase & Co. raised the diesel-engine maker’s rating to overweight from neutral.
The Hang Seng Index climbed 18 percent from this year’s low in June as economic data showed China’s growth is stabilizing and after the Fed unexpectedly refrained from cutting asset purchases. Hong Kong’s equity benchmark traded at 11.1 times estimated earnings, compared with 15.7 for the Standard & Poor’s 500 Index yesterday.
Futures on the U.S. equity gauge gained 0.2 percent. The index yesterday climbed 0.7 percent after President Barack Obama signed a bill ending the 16-day government shutdown and extending the nation’s borrowing authority until Feb. 7. Shares also rose on speculation the central bank’s reduction of stimulus will be delayed.
BlackRock Inc. and Pacific Investment Management Co. say the Fed will postpone tapering as a result of the debt-ceiling debate. Policy makers in September said bond purchases this year will be cut from a record $85 billion a month. The central bank next meets Oct. 29-30.
Fed Bank of Chicago President Charles Evans, a consistent advocate of pressing on with stimulus, said yesterday the central bank should postpone tapering after the shutdown stopped the flow of economic reports used to gauge growth.
Gold prices headed for their best week in two months as demand for the metal as a haven asset rose on Fed stimulus expectations. Zijin Mining Group gained 2.8 percent to HK$1.83. Zhaojin Mining Industry Co., China’s second-largest gold producer, rose 0.6 percent to HK$6.47.
Sands China, a unit of Sheldon Anderson’s Las Vegas casino company, surged 9.2 percent to HK$58 to lead gains on the Hang Seng Index. Third-quarter profit surged 89 percent to $617.9 million from a year earlier as customers flocked to its new resort. Galaxy Entertainment Group Ltd., controlled by billionaire Lui Che-woo, rose 4.1 percent to HK$59.80.
AIA increased 4.4 percent to HK$40.05. The insurer’s new business value climbed a stronger-than-expected 26 percent in the third quarter. Projected future profitability of new policies increased to a record $379 million from $300 million a year earlier, the company said in a stock exchange filing.
Futures on the Hang Seng Index rose 1.5 percent to 23,308. The Hang Seng Volatility Index dropped 10 percent to 15.23, indicating traders expect the benchmark equity index to swing 4.4 percent in the next 30 days.