Hong Kong Stocks Pare Monthly Decline on U.S. Growth DataEleni Himaras
Hong Kong stocks rose, with the benchmark index paring this month’s loss, as investors were encouraged by U.S. growth and concern receded over possible military action in Syria. Ping An Insurance (Group) Co. advanced after posting higher profit.
Man Wah Holdings Ltd., a sofa maker that gets half its sales from the U.S., gained 5.5 percent after the nation’s economic expansion beat estimates. Ping An climbed 0.9 percent after net income at China’s second-biggest insurer climbed on higher investment income. China Petroleum & Chemical Corp., Asia’s largest refiner, lost 1.8 percent as oil prices slid.
The Hang Seng Index rose 0.1 percent to 21,731.37 at the close in Hong Kong. The gauge capped a 0.6 percent weekly decline and a 0.7 percent monthly slide ahead of expected cuts to U.S. stimulus. The Hang Seng China Enterprises Index fell 0.3 percent to 9,825.21.
“There are still uncertainties in the market -- for today, I think there is some profit-taking,” said Linus Yip, a strategist at First Shanghai Securities in Hong Kong. “Overall, I remain positive on Hong Kong. There have been some signals coming out that the overall market is turning more positive.”
Hong Kong’s equity benchmark climbed 4.5 percent this quarter, outpacing a 2 percent gain in the U.S. and paring the Asian gauge’s retreat this year to 4.1 percent. Its 2013 decline is still the biggest among developed markets tracked by Bloomberg. The gauge traded at 10.4 times estimated earnings, compared with 14.87 for the Standard & Poor’s 500 Index and 13.63 on the Stoxx Europe 600 Index, according to data compiled by Bloomberg.
Futures on the S&P 500 rose 0.1 percent today. The U.S. equity gauge added 0.2 percent yesterday after official data showed economic growth rose at a 2.5 percent annualized rate, up from an initial estimate of 1.7 percent. Jobless claims dropped by 6,000 to 331,000 last week, beating estimates.
Companies linked to the U.S. climbed, with Man Wah rising 5.5 percent to HK$9.44. Yue Yuen Industrial Holdings Ltd., which makes shoes for Nike Inc., added 3.5 percent to HK$23.90.
The Federal Reserve has said any reduction in stimulus will be tied to signs of sustained economic recovery. The central bank is expected to pare asset purchases in September by $10 billion to a $75 billion monthly pace, according to economists surveyed by Bloomberg on Aug. 9-13.
Crude slid a second day as prospects for an imminent strike on Syria eased after U.K. Prime Minister David Cameron failed to get parliamentary approval for military action against the regime, easing concern unrest will disrupt Middle East oil supplies. The U.S., which says it has evidence Syria’s government was responsible for chemical-weapons attacks on its own people, won’t act without allies, Defense Secretary Chuck Hagel said yesterday.
China Petroleum & Chemical, also known as Sinopec, fell 1.8 percent to HK$5.59. Cnooc Ltd., China’s biggest offshore oil and gas explorer, dropped 0.8 percent to HK$15.40.
China Cosco Holdings Co., the nation’s biggest shipping company, added 3.8 percent to HK$3.56. Losses narrowed as asset sales helped offset a freight-rate slump. The loss in the six months through June was 990 million yuan ($162 million), compared with a 4.87 billion-yuan decline a year earlier.
Ping An, China’s second-largest insurer, rose 0.9 percent to HK$54.35. First-half profit increased 28 percent as investment income expanded and earnings from banking operations grew.
China Merchants Holdings International Co. gained 3 percent to HK$26.20, extending yesterday’s surge after the port operator’s rating was raised to outperform from neutral at Credit Suisse Group AG.
The Hang Seng China Enterprises Index, also known as the H-share index, dropped 20 percent from a Feb. 1 high after China’s growth slowed for two quarters. The measure traded at 1.18 times book value, compared with a five-year average of 1.77.
Shanghai Industrial Holdings Ltd. dropped 1 percent to HK$25.40. The shopping-mall operator and producer of consumer goods reported that first-half profit fell 34 percent.
Hang Seng Index futures were little changed at 21,568. The HSI Volatility Index fell 3.5 percent to 19.06, indicating traders expect a swing of 5.5 percent on the benchmark equity gauge over the next 30 days.