HONG KONG, July 14 — Hong Kong stocks rose, with the benchmark index climbing after capping its biggest weekly drop since May, as telecommunications companies jumped.

China Unicom (Hong Kong) Ltd increased 4.7 per cent on speculation it will benefit from a cellular tower joint venture with the nation’s other major mobile carriers. HSBC Holdings Plc provided the second-biggest boost to the Hang Seng Index, with Europe’s biggest bank advancing 0.7 per cent after sinking 2.2 per cent last week. BYD Co, an electric-car maker, gained 3.8 per cent after China issued a mandate requiring more clean-energy government vehicles.

The Hang Seng Index increased 0.5 per cent to 23,346.67 at the close in Hong Kong after slumping 1.3 per cent last week. More than twice as many shares rose as fell on the 50-member gauge. The Hang Seng China Enterprises Index of mainland shares traded in the city, also known as the H-share index, added 0.8 per cent today to 10,457.77.

“There’s an influx of hot money coming to Hong Kong,” said Francis Lun, Hong Kong-based chief executive officer at Geo Securities Ltd. “The market is rebounding from last week’s drop” as concern over Europe eases, while investors watch for Chinese data, he said.

The Hang Seng Index advanced 0.2 per cent this year, reversing losses on signs the economy is stabilising as China rolled out targeted stimulus including reserve-ratio cuts. The gauge traded at 10.9 times estimated earnings today, compared with 7.3 for the H-share index and 16.6 for the Standard & Poor’s 500 Index at the last close.

Developers rise

China’s government may loosen lending in the second half of this year, China Securities Journal reported, citing forecasts by unidentified people in the industry. Reports on new credit in June may be released as soon as today, while data on retail sales, industrial production and second-quarter growth are due later this week.

BYD rose 3.8 per cent to HK$49 (RM20). Geely Automobile Holdings Ltd, which offers electric vehicles through a joint venture, advanced 2 per cent to HK$3.04. China mandated that at least 30 per cent of new government vehicles be powered by alternative energy by 2016 to combat pollution. At least 15 per cent of new vehicles will use new energy this year in areas such as Beijing and the Pearl River Delta in Guangdong, the government said.

Futures on the S&P 500 added 0.3 per cent today. The underlying gauge rose 0.1 per cent on July 11 as a rally in Amazon.com Inc and EBay Inc led a rebound from earlier declines spurred by financial stress in Europe.

Europe concern

More than US$1 trillion (RM2.9 trillion) has been wiped from the value of global stocks since a peak reached July 3, as analysts brought forward estimates for Federal Reserve interest-rate increases and a parent of Portugal’s Banco Espirito Santo SA missed a bond payment, reigniting concerns over Europe’s financial stability as it emerges from its sovereign-debt crisis.

The Hong Kong Monetary Authority, the city’s de facto central bank, bought US$1 billion to prevent the territory’s currency from rising beyond its permitted range against the dollar. The purchase follows an earlier injection of HK$2.3 billion into the city’s banking system.

HSBC rose 0.7 per cent to HK$79.15, while Tencent advanced 1 per cent to HK$122.80.

China Unicom rose 4.7 per cent to HK$12.86. China Mobile Ltd, the world’s largest mobile-phone carrier by subscribers, climbed 2.6 per cent to HK$78.55, the biggest boost to the Hang Seng Index. China Telecom Corp. advanced 3.9 per cent to HK$4.05.

The carriers formed China Communications Facilities Services Corp., which will have registered capital of 10 billion yuan (RM5 billion), the companies said last week. Combined annual savings on capital expenditure will be between about 30 billion yuan and 40 billion yuan, Standard Chartered Plc said.

Brilliance China Automotive Holdings Ltd, a partner of Bayerische Motoren Werke AG, dropped 5.1 per cent to HK$14.90. Macquarie Group Ltd cut its rating on the stock to neutral from outperform. — Bloomberg