Hong Kong Stocks Pare Biggest Weekly Loss in a Month After Data

  • Factory-gate prices increase for the first time since 2012
  • Data follows disappointing trade figures for September

Hong Kong stocks rose, paring their worst weekly loss in a month, as figures showing China’s producer prices increased for the first time since 2012 eased concern over the state of Asia’s largest economy.

The Hang Seng Index closed 0.9 percent higher, trimming its weekly decline to 2.6 percent. AIA Group Ltd. advanced for the first time this week after reporting better-than-expected growth in new business value. Cnooc Ltd. led energy producers higher as New York crude rose for a second day. Sinochem International Corp. jumped the most in a year in Shanghai as China was said to plan merging its largest shareholder with China National Chemical Corp. The Shanghai Composite Index gained 0.1 percent.

Friday’s gains snap the biggest four-day loss for Hong Kong stocks in four months. Shares slumped after China’s exports disappointed, a raft of cities imposed restrictions to cool the property market and traders boosted bets on higher U.S. borrowing costs. Mainland banks, which were some of the best performers last quarter, tumbled this week as a flood of money via an exchange link with Shanghai ebbed.

“The rising producer-price index fuels optimism and an uptick in oil prices helps lift sentiment,” said Jingyi Pan, a Singapore-based market strategist at IG Asia Pte. “The market has more or less priced in expectations of a U.S. rate hike.”

Daily net buying of Hong Kong shares through the Shanghai stock link fell to about 1 billion yuan ($149 million) on average in the past three weeks, compared with September’s 3.7 billion yuan daily average. Less than 5 percent of the daily quota of 10.5 billion yuan was used up on Friday.

The producer-price index rose 0.1 percent in September from a year earlier, compared with a 0.3 percent drop estimated by economists in a Bloomberg survey. Monthly consumer prices gained 1.9 percent versus a forecast for a 1.6 percent increase.

AIA advanced 1.2 percent, paring this week’s decline to 3.4 percent. New business value increased by a higher-than-estimated 25 percent in the third quarter, the insurer reported Friday. Li & Fung Ltd., among this year’s worst-performing stocks on the Hang Seng Index, climbed 1.6 percent.

Sinochem Jumps

Sinochem International surged by the 10 percent daily limit. Sinochem Group’s planned merger with China National Chemical Corp. would create a company with more than $100 billion in assets and comes as the government tries to overhaul state-owned enterprises, according to a person familiar with the matter. ChemChina unit Aeolus Tyre Co. climbed 3.3 percent.

Bank of Communications Co. and China Construction Bank Corp. rose more than 1.6 percent in Hong Kong, leading gains by Chinese lenders. The two banks ended the week at least 4.4 percent lower.

The Hang Seng China Enterprises Index gained 1.1 percent, paring this week’s loss to 3.3 percent.

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