Hong Kong Stocks Head for Two-Week Rise Before China GDP
Hong Kong stocks rose, with the benchmark index heading for a two-week advance, ahead of data today expected to show China’s economic growth accelerated. Shares also rose on speculation the Federal Reserve will maintain stimulus in the wake of the U.S. budget showdown.
The Hang Seng Index (HSI) gained 0.7 percent to 23,260.03 as of 9:32 a.m. in Hong Kong, headed for an 0.2 percent advance this week. The Hang Seng China Enterprises Index (HSCEI), also known as the H-share index, added 0.6 percent to 10,633.08.
The Hang Seng Index climbed 17 percent from this year’s low in June through yesterday 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 times estimated earnings yesterday, compared with 15.7 for the Standard & Poor’s 500 Index.
China releases gross domestic product data today, with economists predicting 7.8 percent expansion in the three months through Sept. 30 from 7.5 percent in the previous quarter. Data on industrial production and retail sales are also due.
Futures on the S&P 500 gained 0.2 percent. The U.S. equity gauge 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.
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