Hong Kong stocks rose Thursday, driving the Hang Seng Index (HSI) up by the most in a month, as faster-than-estimated growth in US manufacturing boosted optimism of a global economic recovery.

HSBC Holdings Plc, which made 20 percent of its 2009 revenue in North America, climbed 2 percent after a report it may manage a share sale in Steel Authority of India Ltd.

Jiangxi Copper Co, the country's No 1 producer of the metal, advanced 2.4 percent as commodity prices rose.

The HSI rose 1.2 percent to 20,868.92 at the close, the biggest gain since August 2. All but six stocks increased on the 43-member gauge. The Hang Seng China Enterprises Index of mainland-based Chinese companies listed in Hong Kong surged 1.7 percent to 11,688.84.

"The market has recently been bearish, and the US manufacturing data gives a good catalyst to cover the shorts," said Alex Au, managing director of Richland Capital Management Ltd in Hong Kong, which oversees $300 million of assets.

The HSI fell 2.4 percent last month as disappointing economic data and continued concerns about Europe's debt and Beijing's measure to cool the mainland property market dampened investor confidence. That brought the stocks in the gauge to an average of 13.5 times estimated earnings, Bloomberg data show, compared with 17.2 times at the beginning of the year.

Yue Yuen Industrial Holdings Ltd, which makes shoes for Nike Inc, rose 0.6 percent to HK$25.30. Techtronic Industries Co, maker of Hoover vacuum cleaners and Ryobi power tools that got 76 percent of its fiscal 2009 revenue from North America, rose 2.9 percent to HK$7.06.

Futures on the Standard & Poor's 500 Index fell 0.2 percent Thursday. The index jumped 3 percent Wednesday, the biggest gain since July 7, after the US-based Institute for Supply Management's factory index rose to a three-month high of 56.3 in July. Readings greater than 50 signal growth in manufacturing. The measure was projected to drop to 52.8 from 55.5, according to the median forecast of economists in a Bloomberg News survey.

"Investors are reacting sensitively to the positive news, while still being cautious about the overall global economy," said Castor Pang, Hong Kong-based research director at Cinda International Holdings Ltd.

Cnooc Ltd climbed 0.8 percent to HK$13.32. PetroChina, Asia's largest company by market value, increased 1.1 percent to HK$8.58, and China Petroleum & Chemical Corp gained 0.9 percent to HK$6.16.

Copper futures for December delivery jumped 3.2 percent in New York Wednesday, and crude-oil futures for October delivery rose 2.8 percent after the US manufacturing data raised confidence consumption of the commodities will increase.

Guangzhou Automobile Group Co, a partner of Toyota Motor Corp and Honda Motor Co on the mainland, soared 8.1 percent to HK$9.86 after China Automotive Technology & Research Center said Wednesday the nation's retail passenger-car sales in August rose 59.3 percent from a year earlier to 977,330 units.

Bloomberg News

(HK Edition 09/03/2010 page3)