Stocks rise as banks extend gains
Updated: 2010-10-15 06:52
(HK Edition)
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Hong Kong stocks rose as lenders gained for a second day after Chinese bank loans increased, and as commodity producers climbed on higher oil and metal prices.
ICBC advanced 5 percent after a report from the People's Bank of China Wednesday showed mainland banks extended 595.5 billion yuan ($89 billion) in new local-currency loans last month.
The Hang Seng Index (HSI) climbed 1.7 percent to 23,852.17. About twice as many stocks rose as fell on the 45-member gauge. The Hang Seng China Enterprises Index advanced 2.1 percent to 13,575.95.
"There are expectations for China's banking sectors and its strong loan growth," said Castor Pang, Hong Kong-based research director at Cinda International Holdings Ltd. "The increase in new loans eased concerns about China's further tightening measures this year."
A measure of banks had the biggest gain among the HSI's four industry groups for a second day. Bank of Communications climbed 3.4 percent to HK$9.24. Bank of China Ltd advanced 3 percent to HK$4.49.
PetroChina jumped 1.2 percent to HK$10.06, and Cnooc Ltd increased 4.4 percent to HK$16.72.
Jiangxi Copper rose 5.7 percent to HK$23.15, while Zhaojin Mining Industry Co jumped 1.4 percent to HK$26.35.
Crude oil for November delivery rose 1.6 percent Wednesday to settle at $83.01 a barrel in New York. The London Metal Exchange Index advanced 0.3 percent that day.
"Overall demand for materials in the future seems quite promising. If the US and China continue to deliver a strong economic rebound, then commodity stocks in the short term will be quite attractive," Cinda's Pang said.
Citigroup Inc raised its forecast for growth in the HSI for the end of 2011, in a report dated Wednesday. The brokerage increased its estimate by 13 percent to 26,500, citing improved earnings expectations.
Futures on the HSI increased 1.2 percent to 23,874.
Bloomberg
(HK Edition 10/15/2010 page3)