HK shines as worries over fuel costs ease

By Hanny Wan  |   2008-8-8  |     NEWSPAPER EDITION

HONG Kong stocks rose the most in a week yesterday after a retreat in crude oil prices eased concern higher energy costs will hurt consumption and earnings.

Esprit Holdings Ltd, a global clothing retailer, jumped the most in two weeks. China Petroleum and Chemical Corp, the nation's biggest refiner, advanced after oil prices fell on Wednesday to a three-month low. Cathay Pacific Airways Ltd retreated the most in a month after reporting its first loss in five years. The stock market was closed because of a typhoon on Wednesday when the MSCI Asia Pacific Index rallied 1.5 percent.

Given a decline in oil prices, "refiners are probably the more direct beneficiaries," said Gary Chan, a portfolio manager at Mirae Asset Global Investments (Hong Kong) Ltd, which oversees more than US$3 billion. "The airline sector is getting more and more competitive across the world. I think we can see a better entry point."

The Hang Seng Index added 154.45, or 0.7 percent, to close at 22,104.20, its steepest advance since July 30, Bloomberg News said.

Esprit climbed 3.8 percent to HK$83 (US$10.63), its largest jump since July 23. Sinopec, as China Petroleum is known, rose 1.1 percent to HK$8.16, its largest advance since August 1.