HONG KONG: Hong Kong stocks rose as higher commodity prices and better-than-estimated earnings from Apple boosted confidence in the global economic recovery.

The Hang Seng Index rose 0.8 percent to 22,384.96 at the close. The Hang Seng China Enterprises Index, which tracks H-shares of mainland companies, rose 0.7 percent to 13,039.96.

"Rising commodity prices and earnings that beat estimates should boost confidence in the economy and the market," said Castor Pang, a research director at CINDA International Holdings. "A continued rise in commodity prices could trigger inflation and prompt some monetary tightening. That may hinder the market," he warned.Industrial & Commercial Bank of China, the world's biggest lender by market value, climbed 2.4 percent as Allianz SE and American Express Co said they will keep their stakes in the bank. Foxconn International Holdings Ltd, the No 1 contract-maker of mobile phones, rose 6.3 percent as better-than-estimated earnings from Apple and Texas Instruments spurred optimism the technology sector is recovering.

ICBC climbed 2.4 percent to HK$6.34. Allianz and American Express have no immediate plans to sell ICBC shares after a lockup period expires yesterday, the companies and ICBC said Monday. Allianz has 3.22 billion Hong Kong-traded ICBC shares, worth HK$19.9 billion ($2.57 billion), while American Express owns 638 million shares with a value of HK$3.95 billion.

Foxconn advanced 6.3 percent to HK$7.06. Apple's fourth-quarter net income rose 47 percent to $1.67 billion. Texas Instruments, the second-largest US chipmaker, forecast profit and sales for July through September that beat analysts' estimates, indicating demand for electronic components is recovering further.

The Hang Seng Index has surged 97 percent from a low for the year on March 9 as stimulus measures revived economies around the world. Shares on the gauge are priced at an average 17.9 times estimated profit, up from 10.6 times at the start of 2009, according to Bloomberg.

The Hang Seng Property Index advanced 5.8 percent after Hang Lung Properties' chairman said he doesn't see a bubble in the city's luxury home market.

Shipping stocks gained after the Baltic Dry Index, which measures the cost of shipping commodities, climbed 1.4 percent in London overnight, taking gains in the past three days to 6.5 percent. Pacific Basin Shipping, Hong Kong's biggest bulk carrier, rose 2.1 percent to HK$5.86. China Cosco Holdings, the world's largest operator of dry-bulk ships, added 0.6 percent to HK$10.78.

Among decliners, HSBC dropped 0.5 percent to close at HK$89.30. The stock, which has the heaviest weighting in the Hang Seng Index, climbed as much as 0.9 percent before dropping in the final hour of trade as Barclays Plc tumbled in London after Qatar Holding LLC said it will sell shares.

China Daily/Bloomberg

(HK Edition 10/21/2009 page4)