Hong Kong Stocks Rise Most in Two Months; Energy Shares Advance

  • PetroChina, China Shenhua lead gains among energy stocks
  • Property developers in Hong Kong rise for the fifth day

Hong Kong stocks climbed the most in two months as China Shenhua Energy Co. and PetroChina Co. led gains by energy companies and insurers rallied.

The Hang Seng Index rose 1.5 percent to 22,456.69 at the close, a three-week high. PetroChina jumped 4.2 percent and China Petroleum & Chemical Corp. advanced the most in three weeks after crude advanced. AIA Group Ltd. increased 2.1 percent. The Hang Seng China Enterprises Index jumped 1.7 percent, the most in six weeks, with all but one of its 40 members posting gains. The Shanghai Composite Index rose 0.2 percent.

Hong Kong equities are starting 2017 on a brighter note after tumbling last month. Federal Reserve meeting minutes released Wednesday indicated officials intended to maintain a gradual approach to raising interest rates, while the offshore yuan surged to its biggest two-day advance since 2010.

"Worries about a softer yuan eased and capital outflow pressure may be cushioned as the Fed indicates preference for gradual rate hikes," said Castor Pang, head of research at Core-Pacific Yamaichi.

The Hang Seng Property Index rose for the fifth day, its longest rally since November, led by China Resources Land Ltd. and Link Real Estate Investment Trust. This comes after a dismal fourth quarter during which the gauge posted a 15.1 percent loss.

Implied volatility in Hong Kong stocks is near a one-month low as trading volume remains subdued after the December holidays. Trading turnover in Hong Kong totaled HK$64.6 billion, the highest level since December 16, yet still shy of the HK$66 billion daily average over the past 12 months.

  • China Mengniu Dairy Co. lost 2.7% after the company agreed to buy China Modern Dairy Holdings Ltd, which jumped 5.5%
  • A gauge of China’s December PMI tracked by Caixin Media and Markit Economics rose to 53.5 from 52.9, the highest reading since March 2013
  • AAC Technologies Holdings Inc. rose 3.6%, taking its 14-day relative-strength index to a level some traders see as overbought
  • Guangzhou Automobile Group Co. fell 0.6%, paring an earlier loss of more than 3% after Nomura Holdings Inc. downgraded the automaker on a lower growth outlook for China’s automotive industry
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