HONG KONG: Hong Kong stocks headed for a two-week high as casino operators and automakers extended gains on targeted government support and traders pushed back estimates for the timing of higher U.S. interest rates.
The Hang Seng China Enterprises Index gained 2.6 percent to 9,941.75 as of 10:21 a.m. in Hong Kong, poised for its highest close since Sept. 18. Gaming companies surged after reports that China may move to bolster the city’s economy, and figures showed a jump in Chinese visitors to Macau on the first three days of a weeklong holiday. Great Wall Motor Co. headed for a three-day, 37 percent advance after a tax cut on passenger-vehicle purchases. A report last week showed U.S. employers added 142,000 workers in September, less than the lowest estimate of 96 economists surveyed by Bloomberg.
“Investors are not as risk averse,” said Ben Kwong, a director at brokerage KGI Asia Ltd. With U.S. jobs numbers missing estimates, “investors tend to take negative news as positive as that lowers the chances of interest-rate hike in October or even December. China is stepping up its efforts to support the economy, not only monetary policy but fiscal policy as well.”
The Hang Seng Index gained 1.9 percent. Mainland markets will remain shut until Oct. 8 for National Day holidays.
Chinese policy makers are increasing targeted stimulus after reductions in interest-rate and reserve ratio requirement failed to reverse an economic slowdown. The nation’s growth will slow to 6.8 percent this year, below the government’s goal of 7 percent, according to the median of economist estimates compiled by Bloomberg. The People’s Bank of China reduced the minimum home down payment for first-time buyers in cities without purchase restrictions last week, buoying shares of developers.
The U.S. jobs report also revised down employment gains in the previous two months by a total of 59,000 jobs. The probability the Fed will raise rates by its Dec. 15-16 meeting fell to 33 percent from 46 percent before the jobs report.