Hong Kong Stocks Advance as Oil Price Gain Buoys Energy Shares

  • China Oilfield, PetroChina jump as crude crosses $51 a barrel
  • Share gains won’t last as turnover too low, CCB analyst says

Hong Kong’s equity benchmarks rose, with energy companies leading the advance as crude oil traded near a 15-month high.

The Hang Seng Index added 0.3 percent. China Oilfield Services Ltd. surged to levels last seen in November 2015 while PetroChina Co. advanced the most in two weeks after a drop in U.S. crude stockpiles pushed oil to more than $51 a barrel.

The rally in energy companies fueled gains in a stock market that has been treading water this month as inflows from mainland investors dry up and turnover falls to the lowest level in three months. This is a reversal from the July-September period, when record inflows of cash via a stock link with Shanghai and fading concerns of a Chinese hard landing helped send Hong Kong’s benchmark index to its biggest quarterly gain in seven years.

"In the short term, people think the Chinese economy is better than expected, so money may be re-entering stocks,” said Peter So, co-head of research at CCB International Securities Ltd. in Hong Kong. “But turnover is so low, so the gains probably won’t last.”

The Hang Seng Index closed at 23,374.4, with turnover near the lowest since July on Thursday. The Hang Seng China Enterprises Index rose 0.5 percent, while the Shanghai Composite Index was little changed. A Hong Kong gauge of developers defied the broader upward trend to fall for a second day on concern of a mainland crackdown on real-estate prices. China Oilfield jumped 5.4 percent, while PetroChina rose 3 percent.

The Chinese government has realized it must take action to restore order to the property market and decided to remove market-disrupting "tumors," the official Xinhua News Agency wrote in a commentary. At least 21 cities have introduced purchase restrictions and toughened mortgage lending since late September, and the Shanghai Stock Exchange has temporarily halted approving some property bond sales, said people familiar with the matter.

A Hong Kong tribunal banned U.S. short-seller Andrew Left of Citron Research from trading in the city’s market for five years after publishing “false and/or misleading” claims about a locally listed firms. He said he plans to appeal.

Reports released Wednesday showed China’s third-quarter economic expansion and September retail sales met estimates, supporting optimism that growth is stabilizing after credit data released earlier this week exceeded expectations.

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