HK snaps out of four-day stock drop

By Hanny Wan  |   2008-7-31  |     NEWSPAPER EDITION

HONG Kong stocks rose yesterday, snapping a four-day decline, as refiners and airlines climbed after crude oil traded near a 12-week low.

China Petroleum & Chemical Corp, the nation's biggest refiner, climbed to a six-week high on easing concerns over high raw-material costs, Bloomberg News reported. Cathay Pacific Airways Ltd, the city's flag-carrier, gained on expectations falling crude prices would reduce jet-fuel expenses.

Industrial and Commercial Bank of China Ltd, the world's largest by market value, and Sino Land Co led gains by lenders and developers on speculation cheaper oil will curb inflation and ease pressure on banks to increase borrowing costs.

"People believe it's a sustained decline" in the price of oil, said Francis Lun, general manager at Fulbright Securities Ltd in Hong Kong.

The Hang Seng Index added 432.60, or 1.9 percent, to 22,690.60 at the close, halting a four-day, 3.8 percent decline. All but five stocks on the 43-member gauge advanced. July futures, which expired after the market closed, climbed 1.8 percent to 22,676. The more active August futures added 2.4 percent to 22,800.

The benchmark has lost 18 percent this year as soaring raw-material prices and US$473 billion of writedowns and credit-related losses hurt the outlook for economic and profit growth. Hong Kong's inflation accelerated in June to the fastest pace in four months. The Hang Seng China Enterprises Index, which tracks so-called H shares of Chinese companies, rose 2.6 percent to 12,469.26.