Chinese Stocks Rise to Two-Month High on Energy Shares, PMI

  • Oil firms lead gains after OPEC agrees to production cut
  • Official factory-gate PMI raises optimism on economy

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Chinese companies traded in Hong Kong rose to a nearly two-month high, as oil companies rallied after OPEC reached a deal and amid optimism the mainland economy is stabilizing.

The Hang Seng China Enterprises Index rose 0.6 percent at the close. China Oilfield Services Ltd. and PetroChina Co. led the gains with jumps of at least 4.7 percent after oil surged 9.3 percent in New York. The Organization of Petroleum Exporting Countries agreed to reduce collective production to 32.5 million barrels a day, Iranian Oil Minister Bijan Namdar Zanganeh said in Vienna Wednesday. The Shanghai Composite Index gained 0.7 percent after data showed China’s official factory gauge climbed to the highest since July 2014.

“The news was out of expectations and had an impact on oil plays -- but it may not be long lasting,” said Linus Yip, a Hong Kong-based strategist at First Shanghai Securities Ltd. “We can see that Chinese economy is being well maintained at current levels. Markets have a chance to test higher in December.”

The H-share index capped its biggest monthly gain since February as a rally by insurers and brokerages helped reverse losses. Insurers jumped amid bets their investment returns will increase with rallying mainland markets. The Shanghai Composite Index is headed for a rise of more than 8.9 percent this quarter as the rollout of property curbs boosted the lure of equities and as so-called old economy companies climbed due to optimism China’s authorities will lift fiscal spending to stimulate growth.

The Hang Seng China Enterprises Index rose to 9,892.31, while the Shanghai Composite Index traded at 3,273.31.

China’s manufacturing purchasing managers index rose to 51.7 in November, the National Bureau of Statistics said, as a credit-fueled recovery of smokestack industries helped steady the economy. A Bloomberg survey of economists found a median estimate of 51. The non-manufacturing PMI was at 54.7 compared with 54 in October. Numbers higher than 50 indicate improving conditions.

The Hang Seng Index advanced 0.4 percent, with volume that was 41 percent more than its 30-day average, according to data compiled by Bloomberg. CT Environmental Group Ltd. tumbled 22 percent as it resumed trading following the company’s rebuttal to allegations made by short seller Glaucus Research Group. Fullshare Holdings Ltd. sank 11 percent on heavy volume amid profit taking after being added to MSCI China Index on Wednesday.

— With assistance by Moxy Ying

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