Hong Kong shares closed 8.66 percent higher yesterday, lifted by hopes that the central government will unveil further measures to boost the economy, dealers said. The benchmark Hang Seng Index rose 1,198.78 points to end at 15,044.87. AFP

Hong Kong shares soared 8.66 percent to a seven-week high yesterday on hopes that further measures by the central government will help bolster economic growth. The benchmark Hang Seng Index (HSI) rose 1,198.78 points, its biggest percentage gain in more than five weeks, to close at 15,044.87, its highest level since Oct 20, as financial and property stocks skyrocketed.

Shares were traded actively with the mainboard turnover surging to HK$64 billion compared with HK$37.3 billion on Friday.

Index heavyweight China Mobile gained with a 7.81 percent jump and HSBC edged up 5.04 percent.

The broad market sentiment is unlikely to change, said Matthew Kwok, a research head at Tanrich Financial.

"Not only the local market, but the Asia markets rally on the back of improved sentiment," he said, noting that investors are optimistic about the central banks and governments' measures in boosting the global economy.

Mainland banks soared on hopes of further measures to be announced by the central government during the annual economic policy meeting. China Construction Bank vaulted 9.98 percent to end at HK$4.85; top lender ICBC closed 7.37 percent higher at HK$4.37, and China Merchants Bank jumped 12.79 percent to HK$14.46.

Mainland developers extended last week's rallies, the stocks climbed as investors awaited policy announcements from the central government to boost the ailing sector.

Guangzhou R&F Properties soared 20.84 percent and Shui On Land gained 24.74 percent. China Overseas Land Investment climbed 14.79 percent while China Resources Land closed 7.58 percent higher.

Oil producer CNOOC gained 8.76 percent and PetroChina jumped 7.2 percent as the crude oil futures climbed for the first time in seven days.

The China Enterprises Index of top locally listed mainland firms soared 9.54 percent or 708.91 points to 8137.45.

Tanrich Financial's Kwok said the market sentiment turned bullish on hopes of more stimulus or rescue measures. "Funds are chasing higher risk investment, returning back to the equity markets from the bond market," he said.

He expects the HSI to test 15,800 to 16,000-point level this week, adding that the Hong Kong stock markets will gain very strong support if the central government launches more stimulus measures after the policy meeting.

(HK Edition 12/09/2008 page2)