Hong Kong Stocks Rise on U.S. Jobs as Energy Shares ClimbKana Nishizawa
Hong Kong stocks rose, with the benchmark index gaining the most in more than a week, after U.S. employment grew more than forecast in April, boosting confidence in the world’s largest economy.
HSBC Holdings Plc, a lender that got a fifth of its revenue in the U.S. last year, advanced 0.9 percent. Jiangxi Copper Co. and Cnooc Ltd. paced gains among resource and energy shares on higher metal and crude prices. Galaxy Entertainment Group Ltd. climbed 5.9 percent after the casino operator said it will buy a Macau resort.
The Hang Seng Index added 1 percent to close at 22,915.09, with almost seven stocks rising for each that fell. The 50-member gauge, the third-worst performer among developed markets this year, rose the most since April 24. The Hang Seng China Enterprises Index of mainland companies increased 1.4 percent to 11,001.77 even after a report on China’s services industries showed slower growth last month.
“Some of the funds are beginning to switch from stock markets that rose a lot to laggards like Hong Kong,” said Peter Lai, director of sales at brokerage DBS Vickers Hong Kong Ltd. The U.S. jobs data is having a positive impact on sentiment and “because of China’s disappointing economic figures the last few months, people are expecting a loosening of monetary policy,” he said.
The Hang Seng Index lost 4.8 percent from a Jan. 30 high through May 3. The measure traded at 10.6 times estimated earnings on May 3, compared with a five-year average of 12.8 and the Standard & Poor’s 500 Index’s multiple of 14.6, according to data compiled by Bloomberg.
Futures on the S&P 500 Index rose 0.1 percent today after the gauge closed at a record high May 3. The U.S. bull market entered its fifth year in March and the S&P 500 has surged 139 percent from a 12-year low in 2009, driven by better-than-estimated corporate earnings and three rounds of bond purchases by the Federal Reserve.
U.S. payrolls expanded by 165,000 last month and revisions to the prior two months added a total of 114,000 jobs, a government report showed May 3. The median forecast of economists in a Bloomberg survey called for an increase of 140,000 positions.
HSBC rose 0.9 percent to HK$86.05. Johnson Electric Holdings Ltd., a motor maker that gets about a fifth of its revenue from the U.S., rose 1.7 percent to HK$5.41.
Cnooc, China’s biggest offshore oil company, rose 1.4 percent to HK$14.38. PetroChina Co., the country’s biggest energy producer, gained 2.1 percent to HK$9.73. Jiangxi Copper, the mainland’s largest producer of the metal, jumped 5.3 percent to HK$15.88. China Rare Earth Holdings Ltd. surged 14 percent to HK$1.41.
West Texas Intermediate oil for June delivery rose 1.7 percent in New York on May 3, while the London Metal Exchange Index of industrial metals surged 5.2 percent.
Hong Kong Exchanges & Clearing Ltd. climbed 2.4 percent to HK$134.40 after term sheets showed China Galaxy Securities Co. and Sinopec Engineering Group Co. plan to raise as much as a combined $3.6 billion in initial public offerings on the bourse this month.
“People expect turnover will increase in the second-half of the year with two new IPOs,” said DBS Vickers’ Lai. “This kind of good sentiment will trigger buying of exchange.”
Galaxy advanced 5.9 percent to HK$36.15 after saying it would pay HK$3.25 billion ($419 million) for the Grand Waldo hotel and casino in Macau.
Prada SpA, an Italian maker of luxury handbags listed in the Hong Kong, jumped 6.8 percent to HK$74.20, its biggest gain since Dec. 7. The company may show superior earnings growth, HSBC analysts Erwan Rambourg, Antoine Belge and Sophie Dargnies analysts wrote in a note to investors on May 3.
China Yurun Food Group Ltd., the country’s second-largest meat supplier, surged 13 percent to HK$5.21. Prices in China for pork leg meat fell 0.9 percent between April 21 to 30 as compared with mid April, the National Bureau of Statistics said in a statement on its website.
Hang Seng Index futures gained 1 percent to 22,761. The HSI Volatility Index advanced 0.1 percent to 15.28, indicating traders expect a swing of 4.4 percent for the equity benchmark in the next 30 days.