Hong Kong shares rose 1.59 percent to a three-week high as property stocks gained on hopes of better sales, while news that China's Yunnan province would buy 1 million tons of base metals lifted metal stocks.

The benchmark Hang Seng Index yesterday closed up 220.60 points at 14,108.84, led by a 2.32 percent rise in China Mobile.

Jiangxi Copper surged 8.2 percent and Aluminum Corp of China rose 4.52 percent, while Maanshan Iron and Steel jumped 8.33 percent.

A report on the Ministry of Land and Resources' website said Yunnan will build a stockpile of copper, aluminum and other base metals to help smelters in the region.

"Metal stocks will be getting a lot of support from the government," said Benjamin Collett, head of hedge fund sales at SMBC Co. "China will be spending a lot of money on infrastructure and that will require a lot of raw materials."

Hong Kong developer Sino Land rose 7.72 percent, while Hong Kong's top developer, Sun Hung Kai Properties, gained 1.47 percent.

"Developers are supported by lower mortgage rates at banks, providing a short-term stimulus for property sales," said Castor Pang, strategist at Sun Hung Kai Financial.

A total of HK$43.9 billion worth of shares were traded yesterday, up from HK$42.4 billion on Friday.

Foxconn International Holdings, which makes handsets for Nokia, rose 8.5 percent, buoyed by higher consumer spending in the US over the weekend.

Mainland lenders gained on hopes that lower interest rates on the mainland will spur the domestic economy and help sustain demand for loans and other financial services.

China's top lender ICBC rose nearly 4 percent, while China Construction Bank gained 4.65 percent.

China Overseas Land rallied 9.56 percent, while R&F Properties surged 12.76 percent, and China Resources Land soared 9.74 percent.

The China Enterprise Index of top locally listed mainland firms rose 2.56 percent to 7,391.69.

Bourse operator Hong Kong Exchanges & Clearing rallied 4.92 percent on optimism that the local stock market may sustain last week's 9.7 percent gain.

But TVB bucked the broad market trend to fall 2.83 percen, as the TV company planned to lay off 212 employees.

Reuters

(HK Edition 12/02/2008 page2)