HONG Kong stocks rebounded from their worst week in three months on speculation that declines that pushed the benchmark to the lowest since March 25 were overdone.
China Merchants Holdings (International) Co, the investor in ports that handles a third of the region's containers, climbed after an 11-percent slump in the past four days. China Petroleum & Chemical Corp, the nation's largest refiner, advanced after crude oil prices retreated.
"Investors are taking the recent market plunge as a buying opportunity," said Nancy Lee, a portfolio manager at Taifook Asset Management Ltd, which manages about US$300 million in Hong Kong. "In the short term, the market is probably near a bottom." Lee favors shares of developers in China because of the country's economic outlook.
The Hang Seng Index added 437.39, or 1.9 percent, to close at 23,029.69 yesterday, according to Bloomberg News. The measure dropped 7.4 percent last week, the worst decline since the period ended March 7.
The gauge's 14-day relative strength index, showing how rapidly prices have advanced or retreated during a specified time period, fell to 28.7 on June 13. A reading below 30 is seen by some investors as a signal to buy.
The Hang Seng China Enterprises Index, which tracks H shares of Chinese mainland companies, rose 2.8 percent to 12,558.36.
China Merchants advanced 4.4 percent to HK$32.40 (US$4.13), giving it the biggest percentage gain on the Hang Seng Index.
Cosco Pacific Ltd, Asia's third-biggest container-terminal operator, rose 4 percent to HK$12.88, having dropped 13 percent in the past three sessions.
China Overseas Land & Investment Ltd, a builder controlled by the country's construction ministry, added 3.8 percent to HK$13.54.
China Petroleum, known as Sinopec, climbed 3.4 percent to HK$7.51, its biggest advance since June 2. Cathay Pacific Airways Ltd, Hong Kong's largest airline, rose 2.1 percent to HK$15.60. Fuel accounts for about 30 percent of the airline's net operating costs. Air China Ltd, the country's top airline, added 2.2 percent to HK$5.01.
Most stocks on the 43-member Hang Seng Index advanced yesterday, except for Sino Land Co, which remained unchanged.