HONG Kong stocks yesterday rose for a second day after the US widened the scope of its US$700 billion plan to avert a financial meltdown, easing concerns that global credit losses will slow economic growth further.
HSBC Holdings Plc, Europe's biggest bank, climbed 2 percent as the Henry Paulson-led US Treasury asked Congress to clear plans to clean up bank balance sheets.
Cnooc Ltd, China's biggest offshore oil producer, jumped 6 percent after crude oil prices advanced, Bloomberg News reported.
"I'm expecting a tradable relief rally based on unrealistic expectations triggered by this Paulson package," CLSA Ltd's Christopher Wood, the top-ranked Asian equity strategist according to Institutional Investor, said at an investor conference in Hong Kong yesterday. He recommends China Life Insurance Co and China Overseas Land & Investment Ltd.
The Hang Seng Index advanced 304.47, or 1.6 percent, to 19,632.20 at the close, adding to a 9.6-percent jump on Friday. The measure closed at its highest since September 10. The Hang Seng China Enterprises Index, which tracks so-called H shares of Chinese companies, rose 2.5 percent to 10,227.38.
The Hang Seng Index plunged 15 percent in the seven sessions to Thursday. The losing streak, the longest since a seven-day drop through April 2004, was spurred on by Lehman Brothers Holdings Inc's bankruptcy filing and the US government's takeover of American International Group Inc.