Stocks up as Greece votes for austerity

Updated: 2011-07-01 07:34

By Anna Kitanaka and Lynn Thomasson(HK Edition)

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Hong Kong stocks rose, sending the Hang Seng Index (HSI) to its highest level in two weeks on Thursday, after Greece approved budget cuts that may help avert a default, increasing confidence in the banking system and exporters to Europe.

HSBC Holdings Plc climbed for a third day, gaining 1.5 percent. Cosco Pacific Ltd advanced 2.2 percent for its biggest gain in a month. Tibet 5100 Water Resources Holdings Ltd surged 23 percent in its trading debut.

The HSI gained 1.53 percent to 22398.10, the highest level since June 14, in Hong Kong. Futures on the HSI advanced 1.4 percent to 22,428. The city's stock market will be closed Friday for Hong Kong's Establishment Day.

Greek Prime Minister George Papandreou clinched enough votes Wednesday to pass the first part of an austerity plan aimed at meeting European Union aid requirements and staving off default.

The HSI Volatility Index posted the biggest decline since March, losing 9.8 percent to 18.54. The benchmark gauge for Hong Kong stock options indicates traders expect a swing of 5.3 percent in the HSI in the next 30 days.

German financial companies Wednesday pushed toward an agreement to roll over their Greek bond holdings, a move that would give the cash-strapped country more time to pay, while stopping short of outright debt forgiveness. European officials have called on creditors in the private sector to share the cost of the bailout.

London-based HSBC advanced 1.5 percent to HK$77.05, contributing the most to the benchmark's advance. Cosco Pacific increased 2.2 percent to HK$13.68. Hutchison Whampoa advanced 1.9 percent to HK$84.

The Hang Seng China Enterprises Index rose 1.39 percent to 12576.68. BYD Co led gains in the index, climbing 5.7 percent to HK$25.15, amid speculation it may benefit from government funding for electric-vehicles. Shares of the Chinese automaker part-owned by Warren Buffett's Berkshire Hathaway Inc soared 41 percent in its first day of trading in Shenzhen.

Tibet 5100 Water Resources surged 23 percent to HK$3.69 in its Hong Kong trading debut. The stock had an initial offering price of HK$3 a share.

Skyworth Digital Holdings Ltd rose 8.9 percent, the most in the Hang Seng Composite Index, to HK$4.67. The maker of televisions said late Wednesday that revenue increased 6.9 percent to HK$24.3 billion ($3.1 billion) for the year ended March 31, 2011.

Brightoil Petroleum Holdings Ltd lost 2.6 percent to HK$3.04. The provider of oil industry services said it will change one of its principal accounting policies and restate its accounts for 2009 and 2010.


(HK Edition 07/01/2011 page2)