Hong Kong stocks rose for the first time in three days as economic reports from the U.S. and China showed signs of recovery in the world’s two largest economies. A surge in trading of Ping An Insurance (Group) Co. shares lifted volume on the city’s benchmark index.
Techtronic Industries Co. (669), a powertool maker that counts the U.S. as its No. 1 market, rose 2.2 percent. Jiangxi Copper Co., China’s biggest producer of the commodity, advanced 1.4 percent after the price of the metal increased. Ping An, China’s second-largest insurer, slid 1.7 percent, with trading volume more than 460 times its five-day average for the time of day. HSBC Holdings Plc said regulators cleared a sale of its stake in the insurer.
The Hang Seng Index (HSI) advanced 0.6 percent to 23,868.34 as of 10:34 a.m. in Hong Kong, headed for its highest close since April 2011. All but eight stocks gained in the 50-member gauge, with trading volume more than three times the 30-day average for the time of day, according to data compiled by Bloomberg. The Hang Seng China Enterprises Index of mainland companies climbed 0.6 percent to 12,287.55.
“The U.S. proved to the market the recovery is very healthy,” said Lewis Wan, Hong Kong-based chief investment officer at Pride Investments Group Ltd., which oversees about $250 million. “It sent a very good sentiment to the Hong Kong market. In China, the recovery is also very healthy. We expect to see some profit taking in the coming few days just before the long holiday because the market itself has been rallying.”
Hong Kong market will be shut for three days next week for the Lunar New Year holidays, while markets in mainland China will be closed for the whole week.
The Hang Seng Index last month capped its fifth monthly advance, the longest such streak since July 2009, after the U.S. Federal Reserve embarked on a third round of quantitative easing in September and as China’s economy showed signs of recovery.
The gauge traded at 11.5 times average estimated earnings on Feb.1, compared with 13.7 for the Standard & Poor’s 500 Index and 12.4 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.
Futures on the S&P 500 gained 0.2 percent. The gauge jumped 1 percent on Feb. 1 after U.S. payrolls rose 157,000 in January following a revised 196,000 advance in December and a 247,000 surge in November. Other reports showed manufacturing in the U.S. expanded more than forecast last month, reaching a nine- month high, while confidence among American households unexpectedly rose.
China’s services industries grew at the fastest pace since August as gains in retailing and construction aid government efforts to drive a recovery in the world’s second-biggest economy. The non-manufacturing Purchasing Managers’ Index rose to 56.2 in January from 56.1 in December, the Beijing-based National Bureau of Statistics and China Federation of Logistics & Purchasing said in a statement yesterday. A reading above 50 indicates expansion.
Futures on the Hang Seng Index rose 0.6 percent to 23,909. The HSI Volatility Index (VHSI) increased 2.9 percent to 13.07, indicating traders expect a swing of 3.7 percent for the equity benchmark in the next 30 days.
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