Mainland, HK equities rally

SHANGHAI - Mainland stocks rallied the most in almost a month, led by banks, airlines and property companies, on the prospect that a stronger yuan will tame inflation and reduce the need for interest-rate increases.

"An appreciation in the yuan will reduce inflationary pressures and benefit consumption by increasing purchasing power," said Shi Bo, general manager of Shanghai Elegant Investment Co, which oversees about $278 million in assets, including a fund that was ranked first among the 678 China-based funds tracked by Bloomberg. "It's positive for stocks."

The Shanghai Composite Index gained 72.99, or 2.9 percent, to 2586.21 at the close, the biggest gain since May 24. The CSI 300 Index rose 3.1 percent to 2780.66.