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China: Shares jump to two-month high in Hong Kong as oil gains
[HONG KONG] Chinese stocks in Hong Kong headed for a two-month high after oil jumped and US Federal Reserve officials scaled back their forecasts for interest-rate increases.
The Hang Seng China Enterprises index rose 1.9 per cent. PetroChina Co. jumped the most in three weeks in Hong Kong after oil climbed for a second day, while Ping An Insurance Group Co. extended gains after reporting an increase in earnings.
The Fed on Wednesday held its benchmark rate target steady and its officials lowered their projections to two 25 basis-point increases this year, down from four forecast in December.
Chinese stocks have risen this month amid suspected buying by state-backed funds in some of the nation's biggest companies during annual policy meetings. Premier Li Keqiang said at the close of the National People's Congress Wednesday the government will use "innovative measures" to keep economic growth on track.
The pressure on capital outflows from the country has eased significantly on changes in external and internal market conditions, the State Administration of Foreign Exchange said Wednesday.
"The atmosphere in the market is quite favourable, with some buying interest returning" after the close of the NPC meetings, said Zhao Bingtong, a Shenzhen-based trader at Guosen Securities Co.
"Materials and energy companies are receiving some support from a rally in commodity prices after the Fed's decision."
The Hang Seng China gauge climbed to 8,732.84 at 10.36am local time, while the benchmark Hang Seng Index added 1.2 per cent. The Shanghai gauge fell 0.3 per cent to 2,862.59 after rising the previous four days.
China will find new drivers to fuel its expansion if growth drops out of its normal range at a time the sluggish global economy is weighing on the nation's prospects, Mr Li said Wednesday. The premier is striving to restructure China's economy away from a over-reliance on investment and cheap exports after growth slumped to a 25-year low last year.
PetroChina jumped 3.7 per cent in Hong Kong while China Petroleum & Chemical Corp. increased 2.1 per cent as oil prices extended gains after climbing the most in more than three weeks.
Ping An paced advances by financial companies after it reported a 38 per cent rise in 2015 net income this week.