Bloomberg (30/12) -- Hong Kong stocks rose, with the citys equity benchmark extending its biggest weekly profit since November, after Premier Li Keqiang said conditions are in place to save Chinas economy and markets stable.
The Hang Seng Index climbed 0.5 percent to 23,365.44 at 9:31 a.m. in Hong Kong after rising 1.9 percent last week. More than four stocks gained for each that fell on the 50-member gauge today. The Hang Seng China Enterprises Index, also known as the H-share index, added 0.5 percent to 10,882.79. Chinas Shanghai Composite Index rose 0.5 percent.
The Hang Seng Index advanced 17 percent from its June low through Dec. 27 amid signs Chinas economy is stabilizing and the U.S. recovery is gaining momentum. The measure traded at 11.1 times estimated earnings as of the end of last week, compared with 16.7 for the Standard & Poors 500 Index.
China will implement prudent monetary policy and hold appropriate liquidity, Li said during a Dec. 27 visit to Tianjin, according statement posted on the governments website yesterday.
The H-share index, which climbed 22 percent from its June 25 low this year through Dec. 27, traded at a multiple of 7.9 times profit. The gauge is headed for its first monthly loss since June on soaring funding costs in China. The gauge pared its December decline on Dec. 24 after the Peoples Bank of China conducted its first reverse-repurchase agreements in three weeks, helping ease the tightest financing conditions since a record cash crunch in June.
Chinas benchmark money-market rate will probably remain close a record high in next quarter as policy makers seek to reduce debt, according to a Bloomberg survey. The seven-day repurchase rate will average 4.5 percent, the median of 11 estimates shows, near to the all-time high of 4.65 percent recorded over the three months that started Oct. 1.
Futures on the S&P 500 were tiny changed today after the gauge slipped less than 0.1 percent upon Dec. 27 from an every-time high the previous day amid optimism for the economic recovery.
Bullish options upon the Hang Seng Index rose to a three-year high last week, according to one-month data compiled by Bloomberg. Calls betting upon a 5 percent increase in the gauge cost 0.4 point more than puts protecting against a 5 percent decline Dec. 24, the highest since July 2010, the data showed
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