(Bloomberg) -- Hong Kong stocks climbed to a one-month high, led by energy companies, as an advance in oil prices overshadowed concern that global central banks will rein in stimulus.
Cnooc Ltd. and PetroChina Co. paced the Hang Seng Index's advance, surging more than 3 percent each as crude futures approached $50 a barrel in New York. Oil prices have jumped since OPEC last week agreed to cut production for the first time in eight years. The Hang Seng China Enterprises Index rose 0.6 percent, while the yuan came off a three-week low.
“There's a positive signal for the oil industry from OPEC and share prices are going up,” said Tony Liu, a Hong Kong-based energy analyst at Bocom International Holdings Co. “There's no fundamental change in the oil market as it is just a proposal from OPEC to cut production. The oil price recovery is seen as temporary.”
The Hang Seng Index jumped 12 percent last quarter, its best performance since 2009, as flows through an exchange trading link with Shanghai swelled to a record and China's economy showed signs of stabilization. Bloomberg News reported Tuesday that the European Central Bank is likely to gradually taper asset purchases, while senior Federal Reserve officials called for tighter monetary policy.
PetroChina, Cnooc
The Hang Seng Index rose 0.4 percent to 23,788.31 at the close. Onshore markets are on holiday this week. The offshore yuan fell as much as 0.07 percent before suddenly reversing direction to trade slightly stronger.
Cnooc advanced 3.8 percent, PetroChina added 3.1 percent and Kunlun Energy Co. climbed 2.7 percent. China Oilfield Services Ltd. rallied 6.9 percent to a 10-month high after Nomura Holdings Inc. raised its ratings on the H share to buy. Zijin Mining Group Co. slid 2.4 percent amid a slump in the price of gold.
Link REIT retreated 2.2 percent, New World Development Co. fell 0.8 percent and Henderson Land Development Co declined 0.6 percent, sending the Hang Seng Property Index 0.4 percent lower. In China, Shenzhen and Zhengzhou joined a list of Chinese cities tightening rules to cool property market.
“Prolonged stimulus from global central banks has allowed Hong Kong stocks to recoup lost ground,” said Ronald Wan, chief executive of Partners Capital International Ltd. in Hong Kong. “Once the central banks start to taper, it means liquidity will dry up and interest rates will go higher. There's no doubt that the property sector will get hit the hardest.”
To contact the reporter on this story: Kyoungwha Kim in Hong Kong at kkim19@bloomberg.net. To contact the editors responsible for this story: Richard Frost at rfrost4@bloomberg.net, Robin Ganguly
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