Chinese stocks in Hong Kong rose in their best four-day run since April as automakers resumed their advance and casino operators extended gains.
The Hang Seng China Enterprises Index added 0.5 percent to 9,931.53 at the close in Hong Kong, capping a 7.6 percent four-day increase, as supportive policies from China’s government for car manufacturers and developers buoy investor sentiment, along with prospects of the U.S. keeping interest rates lower for longer. BYD Co. and Geely Automobile Holdings Ltd. climbed, building on last week’s advance after a tax cut on passenger-vehicle purchases. Sands China Ltd. and Wynn Macau Ltd. jumped at least 7.4 percent after JPMorgan Chase & Co. raised its ratings on the gaming companies.
“China has been doing monetary policy adjustments but they are thinking alternative policies may stimulate the market, like particular industry incentives," which will help over the medium term, said Simon Lam, research director at Christfund Securities Ltd. Investors are also preparing for mainland markets to rise when they open from holidays after global markets advanced, he said.
The Hang Seng Index slipped 0.1 percent after rising as much as 1.4 percent, dragged by personal computer maker Lenovo Group Ltd. Mainland markets are shut until Oct. 8 for National Day holidays. The Hang Seng China Enterprises Index is trading at 7.4 times estimated earnings, less than half the global average, after tumbling as much as 39 percent from this year’s peak on concerns about China’s economy. 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.
“People may expect mainland markets to go up after the long holiday but stocks in Hong Kong have rebounded very strongly in recent days," said Dickie Wong, executive director of research at Kingston Financial Group Ltd. “After the recent rebound it’s time to take profit. But the overall market sentiment has been improving."
The U.S. brokered a historic accord Monday to ease trade in goods and services among a dozen Pacific-rim nations that make up about 40 percent of the world economy. China, the largest U.S. trade partner outside North America, is not part of the deal. Supporters of the TPP have promoted the pact as a counterweight to China’s growing influence in the region.
BYD, a manufacturer of electric cars and batteries, led gains on the Hang Seng China Enterprises Index, jumping 5.3 percent. Dongfeng Motor Group Co. advanced 1.8 percent while Geely increased 4.6 percent. Automakers soared last week after the central government cut a tax on passenger-vehicle purchases and said it will support the adoption of electric vehicles.
PetroChina Co. rose 3 percent. Saudi Arabian Oil Co., the world’s largest oil exporter, hired Deutsche Bank AG to advise on the potential acquisition of some marketing, retail and refining assets from China National Petroleum Corp., in a deal that could be worth several billion dollars, according to people with knowledge of the matter. PetroChina is the listed arm of CNPC.
Casino operators Sands surged 8.6 percent and Wynn rallied 7.4 percent. Galaxy Entertainment Group Ltd. advanced 3.9 percent. Macau casino stocks have reached inflection point and it’s time to start building positions, JPMorgan analyst Ds Kim wrote in a note. Gaming shares have been rising amid reports that China may move to bolster Macau’s economy, and figures showed a jump in Chinese visitors to the city during the start of the holiday.