Hong Kong stocks rose, driving the Hang Seng Index (HSI) higher for the first time in three days, after Bank of China Ltd and Jiangxi Copper Co reported higher profit.

"In China, the economy is in very good health, so understandably earnings numbers are good," Steven Sun, head of China equity strategy at HSBC Holdings Plc, said in a Bloomberg Television interview. Even so, earnings are still vulnerable to further policy tightening, he said.

The HSI increased 0.2 percent to 23,210.86 at the close, after falling as much as 0.1 percent. That extended the measure's gain this month to 3.8 percent.

The Hang Seng China Enterprises Index rose 0.5 percent to 13,326.90. Stocks in the gauge trade at an average 14.8 times estimated earnings, compared with about 17.2 times at the start of the year.

Bank of China climbed 2.2 percent to HK$4.66. The company's profit increased to a record 27.2 billion yuan ($4.1 billion), according to its statement Wednesday. That exceeded a 23.9 billion yuan median estimate of nine analysts.

Agricultural Bank of China Ltd advanced 0.3 percent to HK$4.06 after reporting third-quarter profit increased to 24.3 billion yuan in its first quarterly results since completing the world's biggest initial public offering in August. That beat the 22 billion yuan median estimate of five analysts surveyed by Bloomberg.

Industrial & Commercial Bank of China Ltd increased 0.7 percent to HK$6.24, while Bank of Communications Co gained 1.8 percent to HK$9.19 ahead of earnings reports. A measure of banks had the biggest gain among the Hang Seng Index's four industry groups.

Jiangxi Copper Co rose 0.7 percent to HK$21.90 after saying third-quarter profit more than doubled to 1.28 billion yuan as economic growth boosted demand and prices.

Eleven stocks rose for every 10 that fell on the 45-member HSI. Futures on the index gained 0.4 percent to 23,204.

Bloomberg

(HK Edition 10/29/2010 page3)