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Hong Kong Stocks Rise on Phone Companies; Casinos Decline

Hong Kong stocks rose, with the benchmark index advancing from a one-month low, as gains at phone companies offset a slump by casino operators.

China Unicom (Hong Kong) Ltd., the nations no. 2 telecommunications company, rallied the most since October to lead gains on the Hang Seng Index. Sands China Ltd. fell 2.6 percent and Galaxy Entertainment Group Ltd. sank 4.6 percent after analysts trimmed forecasts for growth in Macau gaming revenue this month. Guangzhou Automobile Group Co. climbed 7 percent after a surge in first-quarter earnings.
The Hang Seng Index added 1.5 percent to 22,453.89 at the close in Hong Kong, extending gains in the final 30 minutes of trading. The Hang Seng China Enterprises Index of mainland companies, known as the H-share index, gained 1.2 percent to 9,882.94. Chinas Shanghai Composite Index gained 0.8 percent, after the measure briefly fell below the 2,000 level, as speculation grew that the government will take steps to bolster the economy. The Chinese government has made it clear it will do what it takes to make sure the economy doesnt slip too badly, said Vasu Menon, vice president of wealth management at Oversea-Chinese Banking Corp. in Singapore. China risk is there but it has lessened quite significantly. The government has come through and shown it will act, so Im less worried.

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Futures on the Standard & Poors 500 Index advanced 0.2 percent. Major U.S. indexes recovered in the last hour of trading yesterday, paring losses sparked by the U.S. and European Union levying new sanctions against Russia. The U.S. equities benchmark yesterday closed 0.3 percent higher, erasing losses of as much as 0.7 percent. Internet and smaller companies pulled back from a selloff amid optimism over merger activity. Pfizer Inc. added 4.2 percent after proposing to buy AstraZeneca Plc for about 58.8 billion pounds ($98.7 billion). Mainland Shares The Hang Seng Index (HSI) fell 3.7 percent this year while the H-share gauge lost 8.6 percent as mounting signs of a slowdown fueled speculation China wont meet its official 7.5 percent target for economic expansion. The Hang Seng Index traded at 10.2 times estimated earnings yesterday, compared with 15.9 for the S&P 500. Almost all Chinese provinces failed to meet their growth targets in the first quarter even after scaling back their ambitions as the government instructed officials to focus on reining in debt and curbing pollution. Thirty of 31 provinces and municipalities reported missing their goals, with the biggest shortfall in northeastern Heilongjiang, where an expansion of 4.1 percent compared with an 8.5 percent target for the year. Most localities targets are lower than in 2013. The latest data were released by government websites and newspapers.
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Stimulus Cut In the U.S., the Federal Reserve will probably announce a fourth straight stimulus cut at the conclusion of a two-day meeting tomorrow, according to economists polled by Bloomberg. Phone companies led gains among the 11 industry groups on the Hang Seng Composite Index. China Unicom climbed 6.4 percent to HK$11.24. China Mobile Ltd., the worlds biggest carrier, added 4.6 percent to HK$73.15. Guangzhou Automobile advanced 7 percent to HK$8.14 as first-quarter net income soared 78 percent to 849.2 million yuan. Sands China sank 2.6 percent to HK$57.90, Melco Crown Entertainment Ltd. declined 4.6 percent to HK$86.80 and Galaxy Entertainment slid 4.6 percent to HK$62.30. Brokerages including Wells Fargo & Co. cut forecasts for April gaming revenue in Macau. China Huishan Dairy Holdings Co. tumbled 9.8 percent to HK$1.65; its lowest-ever close. The maker of dairy products extended declines following last weeks share sale. Cultivating Understanding and Earning Trust

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