Chinese Stocks in Hong Kong Rise on Stimulus, U.S. Rate Outlook

Chinese stocks in Hong Kong rose to a two-week high as casino operators extended gains on targeted government support and traders pushed back estimates for the timing of higher U.S. interest rates.

The Hang Seng China Enterprises Index gained 2 percent to 9,883.71, its highest close since Sept. 21. Gaming companies surged after reports that China may move to bolster the city’s economy, and figures showed a jump in Chinese visitors to Macau. Glencore Plc soared as much as 72 percent, the most on record, after reports that the Swiss commodities trader is talking to potential buyers for its agriculture business. Data last week showed U.S. employers added 142,000 workers in September, less than the lowest estimate of 96 economists surveyed by Bloomberg.

“Investors are not as risk averse," said Ben Kwong, a director at brokerage KGI Asia Ltd. With U.S. jobs numbers missing estimates, “investors tend to take negative news as positive as that lowers the chances of interest-rate hike in October or even December. China is stepping up its efforts to support the economy, not only monetary policy but fiscal policy as well."

The Hang Seng Index gained 1.6 percent. Mainland markets will remain shut until Oct. 8 for National Day holidays.

Chinese policy makers are increasing targeted stimulus after reductions in interest-rate and reserve ratio requirement failed to reverse an economic slowdown. The nation’s growth will slow to 6.8 percent this year, below the government’s goal of 7 percent, according to the median of economist estimates compiled by Bloomberg. The People’s Bank of China reduced the minimum home down payment for first-time buyers in cities without purchase restrictions last week, buoying shares of developers.

Jobs Report

The U.S. jobs report also revised down employment gains in the previous two months by a total of 59,000 jobs. The probability the Fed will raise rates by its Dec. 15-16 meeting fell to 34 percent from 46 percent before the jobs report, according to futures data compiled by Bloomberg.

Hong Kong’s former leader Donald Tsang was charged with two counts of misconduct in public office, the Independent Commission Against Corruption said Monday. Tsang, 70, is the city’s highest-ranking official to face charges by the anti-corruption bureau.

Sands China Ltd. climbed 3.4 percent, while Galaxy Entertainment Group Ltd. jumped 5.3 percent. Visitors from China rose 16 percent on Oct. 1 to Oct. 3 from a year earlier, according to official data. Casino operators also surged on Friday after the Macao Daily reported China is studying supportive measures to revive Macau’s economy, citing Li Gang, director of the Chinese government’s local liaison office.

Glencore surged 18 percent in heavy trading, paring earlier gains. Singapore’s sovereign wealth fund, Japanese trading house Mitsui & Co., and a Canadian pension fund are among those interested in buying a minority stake in the agriculture business, people familiar with the situation said last week. The company is talking with Saudi Arabian sovereign wealth fund over sale of stake in the business, Reuters reported on Friday, citing people familiar.

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