Hong Kong stocks rose on Wednesday, with the Hang Seng Index (HSI) climbing for a third day in four, as companies reported higher profits amid speculation a visit by Vice Premier Li Keqiang may herald economic stimulus measures.

The HSI gained 0.38 percent to 20289.03, with about four stocks rising for every three that declined on the 46-member gauge. Stocks pared gains in the afternoon as European stocks declined after the leaders of Germany and France said they wouldn't expand the region's rescue fund to contain its debt crisis.

The Hang Seng China Enterprises Index declined 0.10 percent to 10936.11.

China Minsheng Banking increased 1.3 percent to HK$6.37 after saying its first-half profit surged 57 percent from a year earlier.

Of the 75 companies in the Hang Seng Composite Index that have released semi-annual earnings this month, about 51 percent reported positive growth.

The HSI has tumbled 12 percent this year amid concern that Europe's debt crisis and slowing US economic growth will hurt earnings. The index entered a so-called bear market after falling more than 20 percent from a November 8 high after Standard & Poor's unprecedented cutting of the US government's credit rating on August 5.

Shares on the index traded at 10.8 times forecast earnings, compared with 12 times for the US Standard & Poor's 500 Index.

Bank of East Asia Ltd rose 4 percent to HK$29.85, while BOC Hong Kong increased 4.4 percent to HK$20.40.

Bright Smart Securities & Commodities Group soared 12 percent to 84 HK cents, and Guotai Junan International Holdings Ltd surged 9.9 percent to HK$2.88. First Shanghai Investments Ltd jumped 22 percent and Shenyin Wanguo HK Ltd increased 21 percent.

Vice Premier Li Keqiang said the nation plans to open up its service industries to investment from Hong Kong. The Central government will offer exchange-traded funds linked to the city's stocks, and the nation will also "support" Hong Kong companies in their usage of yuan for foreign-direct investment on the mainland, he said at an economic forum held on Wednesday.

HSBC advanced 1.5 percent to HK$69.45 and Standard Chartered increased 0.7 percent to HK$180. The shares reversed gains or extended declines in Tuesday afternoon as some European countries reported second-quarter growth that disappointed investors.

Futures on the HSI rised 0.2 percent to 20155. The HSI Volatility Index sank 9.9 percent to 29.71.

Bloomberg

(HK Edition 08/18/2011 page1)