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Hong Kong - Chinese stocks in Hong Kong headed for their highest close in six weeks as investors wait for mainland markets to open tomorrow after a week-long holiday. Energy companies surged on higher oil prices while automakers continued their rally.
The Hang Seng China Enterprises Index added 3.8% to 10 312.89 as of 08:49, headed for its highest close since August 20. Cnooc and PetroChina jumped the most on the benchmark Hang Seng Index after crude extended gains from a one-month high. Great Wall Motor soared 15% after trailing gains by other automakers on Tuesday.
The Hang Seng Index increased 2% to 22 275.04. Mainland markets have been shut since October 1 for National Day holidays. The Hang Seng China Enterprises Index traded at 7.4 times estimated earnings at the last close, less than half the global average.
The gauge tumbled as much as 39% from this year’s peak as multiple cuts to interest rates and the reserve requirement ratio failed to revive the nation’s economy.
“H shares are being driven by oil stocks as oil prices surged last night,” said Daniel So, a strategist at CMB International Securities. “Over the next week, H shares will stay strong ahead of the fifth plenary session of the Communist Party of China. People may be optimistic that supportive policies will come out.”
The Communist Party Plenum scheduled for this month is set to chart the path for China’s development.
Almost half of the top 10 gains on the Hang Seng Index were oil companies. Cnooc, China’s biggest offshore oil and gas explorer, surged 11%, while PetroChina and Kunlun Energy jumped at least 6.3%.
Oil futures rose as much as 2.4% in New York as US industry data showed crude stockpiles fell in the world’s biggest consumer. The Energy Information Administration increased its forecast for 2015 global oil demand, according to a monthly report Tuesday.
IMF forecast
The International Monetary Fund cut its global growth outlook for this year to 3.1% from a July forecast of 3.3% amid a slowdown in emerging markets driven by weak commodity prices.
The fund left its outlook for China’s growth this year at 6.8% and 6.3% for next year. Still, the IMF said the “cross-border repercussions”of slowing Chinese growth “appear greater than previously envisaged.”
China’s foreign-exchange reserves fell by a record last quarter as the central bank sold dollars to support the yuan after a surprise devaluation spurred bearish bets on the currency.
The stockpile plunged by $180bn in the three months through September, the most in data going back to 1995, to $3.51trn, according to Bloomberg calculations based on data released by the People’s Bank of China on Wednesday.
