Hong Kong's Stocks Advance; Henderson Land, Chalco Climb

By Hanny Wan

Aug. 7 (Bloomberg) -- Hong Kong stocks rose for the first time in three days, led by developers after the U.S. Federal Reserve's decision to keep the interest rate unchanged raised expectations real estate demand will be sustained. Markets were shut yesterday due to a typhoon.

Henderson Land Development Co., the city's third-largest developer by market value, led gains among developers. Hong Kong's interest rates typically move in step with those in the U.S. because the city's currency is linked to the dollar.

Aluminum Corp. of China Ltd., the nation's largest producer of the metal, known as Chalco, jumped the most in almost a month, after China cut production by more than 10 percent and said yesterday it will limit output until the end of the year.

Cathay Pacific Airways Ltd., Asia's third-biggest carrier by market value, slumped the most in five weeks after posting its first loss in five years and brokerages including Goldman, Sachs & Co. and UBS AG cut their price estimates for the stock.

The Hang Seng Index added 324.18, or 1.5 percent, to 22,273.93 as of 10:13 a.m. local time, halting a two-day, 4 percent decline.

The Hang Seng China Enterprises Index, which tracks so- called H shares of Chinese companies, climbed 1.3 percent to 12,107.23.

To contact the reporter on this story: Hanny Wan in Hong Kong at hwan3@bloomberg.net