Most Hong Kong stocks on the Hang Seng Composite Index rose ahead of a European Central Bank interest-rate decision today and as developers rose on a brokerage upgrade.
Sino Land Co. jumped 4.5 percent after JPMorgan Chase & Co. recommended the property company controlled by billionaire Robert Ng. China Rare Earth Holdings Ltd. jumped 9.5 percent after Reuters reported the country will soon end limits on rare earth exports. Shougang Fushan Resources Group Ltd. sank 4.1 percent to lead energy companies lower after the coal producer said it expects a loss.
About three stocks gained for every two that dropped on the Hang Seng Composite Index, which closed little changed today. The benchmark Hang Seng Index slid 0.2 percent to 23,109.66, with volume 19 percent below the 30-day average. The Hang Seng China Enterprises Index, also known as the H-share index, added 0.5 percent to 10,364.58. The ECB today may become the first major monetary authority to introduce negative interest rates in a bid to ward off deflation.
“Investors are waiting for the ECB policy meeting decision today and U.S. payroll data tomorrow so no one wants to make a big move,” said Jackson Wong, vice president at Tanrich Securities Co. in Hong Kong.
The Hang Seng Index pared losses to 0.8 percent this year after falling as much as 9.1 percent, buoyed by signs of a manufacturing recovery and measures from China’s government to counter an economic slowdown. The equity gauge traded at 10.7 times estimated earnings, compared with 7.2 for the H-share index and 16.3 for the Standard & Poor’s 500 Index.
Hong Kong property companies had the biggest advances on the Hang Seng Index. Sino Land jumped 4.5 percent to HK$12.54, while Henderson Land Development Co., a builder controlled by billionaire Lee Shau-kee, climbed 3.6 percent to HK$52. New World Development Co. gained 1.6 percent. All were raised to overweight at JPMorgan, which cited improving fundamentals for the city’s developers.
Evergrande Real Estate Group Ltd. gained 2.8 percent to HK$3.70. Alibaba Group Holding Ltd. will pay the property company 1.2 billion yuan ($192 million) for a 50 percent stake in Guangzhou Evergrande Football Club, the companies said today.
The China services Purchasing Managers’ Index from HSBC Holdings Plc and Markit Economics slid to 50.7 in May from 51.4 in April, according to a report released today. The nation’s official manufacturing gauge released over the weekend rose to a five-month high of 50.7 in May. Readings above 50 indicate expansion.
China will soon ends tariffs and quotas on exports of rare earths after a World Trade Organization panel found the rules discriminatory, Reuters said, citing a person with direct knowledge of the matter. China Rare Earth jumped 9.5 percent to HK$1.04, while Inner Mongolia Baotou Steel Rare-Earth Hi-Tech Co. and China Minmetals Rare Earth Co. climbed at least 1.6 percent in mainland markets.
Futures on the S&P 500 were little changed. The underlying gauge climbed 0.2 percent to a record yesterday after U.S. service industries expanded in May at the fastest pace in nine months, according to the Institute for Supply Management. The government will release monthly payrolls data tomorrow.
Shougang Fushan dropped 4.1 percent to HK$1.86. The company said it expects a loss for the January to April period on falling sales volume and declining prices.