Hong Kong Stocks Advance on U.S. Stimulus, China TargetKana Nishizawa
Hong Kong stocks rose, with the benchmark index rebounding from yesterday’s loss, amid speculation the Federal Reserve will continue easing measures, and after China maintained its economic-growth target for 2013.
Techtronic Industries Co., a power-tool maker that counts the U.S. as its biggest market, rose 6 percent. China Resources Power Holdings Co., a utility that owns wind farms, jumped 5.4 percent on improved prospects for alternative energy in China. Belle International Holdings Ltd., China’s largest footwear retailer, gained 3.2 percent after the nation’s top economic planner said it will spur domestic demand. Chinese developers extended losses after the nation tightened mortgage rules to cool the property market.
The Hang Seng Index rose 0.1 percent to 22,560.50 at the close after dropping 1.5 percent yesterday. Volume today was 6.6 percent above the 30-day intraday average. The Hang Seng China Enterprises Index of mainland companies climbed 0.6 percent to 11,169.52 as the annual National People’s Congress opened in Beijing.
“At this level, it’s a good time to buy,” said Peter Lai, director of sales at brokerage DBS Vickers Hong Kong Ltd. “The world is flooded with money. Printed money being circulated will encourage people to hold assets. The Chinese government may promote and encourage sectors like infrastructure, consumers, alternative energy and pharmaceuticals at the National People’s Congress.”
Hong Kong’s benchmark index last week erased this year’s gains as developers slid on concern China would introduce more measures to curb property prices. The gauge traded at 10.9 times average estimated earnings yesterday, compared with 13.8 for the Standard & Poor’s 500 Index and 12.4 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.
China today maintained its economic-growth target at 7.5 percent for 2013 while setting a lower inflation goal of 3.5 percent, challenging new leaders to keep prices in check without harming expansion. The median estimate of 43 analysts surveyed in February by Bloomberg News is for growth of 8.1 percent in 2013. China’s services industries expanded at a slower pace in February, a private survey showed today.
Consumer, pharmaceutical and power producers gained. Belle International rose 3.2 percent to HK$14.86. Sinopharm Group Co., the nation’s No. 1 drug distributor, increased 3.5 percent to HK$25.10. China Resources Power jumped 5.4 percent to HK$22.65, the biggest gain on the Hang Seng Index. Huaneng Renewables Corp., an alternative energy company, rose 1.9 percent to HK$2.17.
China will step up efforts to cut emissions and improve energy efficiency this year, the National Development & Reform Commission said in a report today. The country also aims to bolster domestic demand by boosting retail sales 15 percent this year, the commission said.
361 Degrees International Ltd. jumped 5.8 percent to HK$2.38 after the sportswear maker’s full-year profit beat estimates.
Futures on the Standard & Poor’s 500 Index rose 0.1 percent. U.S. shares rose yesterday, sending the Dow Jones Industrial Average to its highest level since 2007, as speculation the Fed will continue stimulus measures countered concern over spending cuts and China’s economy.
Federal Reserve Vice Chairman Janet Yellen said the U.S. central bank should press on with $85 billion in monthly bond buying while tracking risks from the unprecedented program.
Stocks linked to the U.S. gained. Techtronic rose 6 percent to HK$16.68. Man Wah Holdings Ltd., a sofa maker that gets about half its sales from the U.S., gained 5.3 percent to HK$7.52.
Chinese property companies extended losses today. The start of the nation’s tightening cycle will make it hard for the sector to outperform, Matthew Sutherland, investment director for equities at Fidelity Worldwide Investment, wrote in a press release. A measure of developers yesterday dropped the most since October.
China Resources Land Ltd., a state-owned developer, declined 1.9 percent to HK$20.20. Shimao Property Holdings Ltd., the mainland developer controlled by billionaire Hui Wing Mau, sank 1.7 percent to HK$14.28.
Hang Seng Index futures rose 0.2 percent to 22,419. The HSI Volatility Index slid 4.3 percent to 16.15, indicating traders expect a swing of 4.6 percent for the equity benchmark in the next 30 days.