July 14 (Bloomberg) -- Hong Kong stocks rose, with the benchmark index climbing after capping its biggest weekly drop since May, as telecommunications companies jumped.
China Unicom (Hong Kong) Ltd. increased 4.7 percent on speculation it will benefit from a cellular tower joint venture with the nation’s other major mobile carriers. HSBC Holdings Plc provided the second-biggest boost to the Hang Seng Index, with Europe’s biggest bank advancing 0.7 percent after sinking 2.2 percent last week. BYD Co., an electric-car maker, gained 3.8 percent after China issued a mandate requiring more clean-energy government vehicles.
The Hang Seng Index increased 0.5 percent to 23,346.67 at the close in Hong Kong after slumping 1.3 percent last week. More than twice as many shares rose as fell on the 50-member gauge. The Hang Seng China Enterprises Index of mainland shares traded in the city, also known as the H-share index, added 0.8 percent today to 10,457.77.
“There’s an influx of hot money coming to Hong Kong,” said Francis Lun, Hong Kong-based chief executive officer at Geo Securities Ltd. “The market is rebounding from last week’s drop” as concern over Europe eases, while investors watch for Chinese data, he said.
The Hang Seng Index advanced 0.2 percent this year, reversing losses on signs the economy is stabilizing as China rolled out targeted stimulus including reserve-ratio cuts. The gauge traded at 10.9 times estimated earnings today, compared with 7.3 for the H-share index and 16.6 for the Standard & Poor’s 500 Index at the last close.
China’s government may loosen lending in the second half of this year, China Securities Journal reported, citing forecasts by unidentified people in the industry. Reports on new credit in June may be released as soon as today, while data on retail sales, industrial production and second-quarter growth are due later this week.
BYD rose 3.8 percent to HK$49. Geely Automobile Holdings Ltd., which offers electric vehicles through a joint venture, advanced 2 percent to HK$3.04. China mandated that at least 30 percent of new government vehicles be powered by alternative energy by 2016 to combat pollution. At least 15 percent of new vehicles will use new energy this year in areas such as Beijing and the Pearl River Delta in Guangdong, the government said.
Futures on the S&P 500 added 0.3 percent today. The underlying gauge rose 0.1 percent on July 11 as a rally in Amazon.com Inc. and EBay Inc. led a rebound from earlier declines spurred by financial stress in Europe.
More than $1 trillion has been wiped from the value of global stocks since a peak reached July 3, as analysts brought forward estimates for Federal Reserve interest-rate increases and a parent of Portugal’s Banco Espirito Santo SA missed a bond payment, reigniting concerns over Europe’s financial stability as it emerges from its sovereign-debt crisis.
The Hong Kong Monetary Authority, the city’s de facto central bank, bought $1 billion to prevent the territory’s currency from rising beyond its permitted range against the dollar. The purchase follows an earlier injection of HK$2.3 billion ($300 million) into the city’s banking system.
HSBC rose 0.7 percent to HK$79.15, while Tencent advanced 1 percent to HK$122.80.
China Unicom rose 4.7 percent to HK$12.86. China Mobile Ltd., the world’s largest mobile-phone carrier by subscribers, climbed 2.6 percent to HK$78.55, the biggest boost to the Hang Seng Index. China Telecom Corp. advanced 3.9 percent to HK$4.05.
The carriers formed China Communications Facilities Services Corp., which will have registered capital of 10 billion yuan ($1.61 billion), the companies said last week. Combined annual savings on capital expenditure will be between about 30 billion yuan and 40 billion yuan, Standard Chartered Plc said.
Brilliance China Automotive Holdings Ltd., a partner of Bayerische Motoren Werke AG, dropped 5.1 percent to HK$14.90. Macquarie Group Ltd. cut its rating on the stock to neutral from outperform.
To contact the reporter on this story: Kana Nishizawa in Hong Kong at firstname.lastname@example.org
To contact the editors responsible for this story: Sarah McDonald at email@example.com Jim Powell