HONG Kong stocks rose yesterday, with the Hang Seng Index set for its third-largest percentage increase this year, after a report showed China's manufacturing may expand in October for the first time in four months.
Aluminum Corp of China Ltd, the nation's No. 1 producer of the metal by market value, jumped 6.4 percent after commodity prices also rallied on October 21. HSBC Holdings Plc, Europe's biggest bank, gained 3.1 percent as European leaders inched toward a new strategy to contain the region's debt crisis. Industrial & Commercial Bank of China Ltd surged 5.8 percent after Barclays Plc said Chinese lenders may report "strong" profit growth in the third quarter.
The index rose 4.1 percent to close at 18,771.82 in Hong Kong. All stocks rose on the 46-member gauge. The year's biggest single-day percentage increase was on October 6, when the gauge jumped 5.7 percent.
"The concern has been that China is heading for a hard landing and this survey, while it tends to be quite volatile, would seem to contradict that," said Shane Oliver, Sydney-based head of investment strategy at AMP Capital Investors Ltd. "It suggests that China is in much better shape than many had feared, and that there's no hard landing in sight."
Hong Kong's benchmark gauge fell 2.6 percent last week after China reported its slowest economic growth since 2009 and German officials said there wouldn't be a quick fix to Europe's debt crisis. The index tumbled 14 percent last month.
A preliminary index of purchasing managers in China showed a rebound in new orders and output this month. The reading of 51.1 for the index released by HSBC Holdings Plc and Markit Economics yesterday was the highest in five months. A reading above 50 indicates expansion.
The Hang Seng China Enterprises Index of mainland companies listed in Hong Kong gaiend 5.4 percent to 9,717.65 yesterday. The Hang Seng Index has tumbled 19 percent this year amid concern a United States recovery is stalling, and as Europe's leaders grope for ways to maximize the firepower of a European Financial Stability Facility as the debt crisis threatens Italy and Spain.
CSR Corp, a mainland maker of railway equipment, rallied 14 percent to HK$3.75 (48 US cents) and China Railway Group Ltd climbed 11 percent to HK$2.36.
Aluminum Corp jumped 6.4 percent to HK$3.83. China Coal Energy Co surged 7.6 percent to HK$8.75 after reporting that third-quarter net income rose 26 percent.
Source:shanghaidaily