Hong Kong stocks ended higher on Monday ahead of a US Federal Reserve meeting that some investors hope will signal interest rates are nearing a peak, pushing H-shares to their highest close in more than a month.
The benchmark Hang Seng index ended up 0.63 percent at 15,815.87, racking up most of the day's gains in the final hour, while the China Enterprises index of H-shares gained 1.54 percent to 6,701.64.
The Hang Seng property sub-index rose 1.46 percent to 19,583.39, its highest close in more than three weeks.
Analysts said a number of factors had pulled investors back into the market.
"Some investors believe the (US) economic data from last Friday suggested that the cycle of rate increases should be nearing its peak," said Alex Tang, research director at Core Pacific-Yamaichi International (Hong Kong) Ltd, referring to a surprisingly sharp drop in new US home sales in February.
Others said the market rallied on bargain hunting.
"For the local market, the price-to-earnings ratio has fallen near the lower end of the 2005 fiscal year historical P/Es of 12 to 18 times, which makes the shares attractive," said Ernie Hon, analyst at ICEA Securities Asia Ltd.
The average P/E ratio of the Hang Seng index constituents is 14.7, based on Friday's closing prices. Property developer China Resources Land Ltd hit an eight-year high after reporting its 2005 net profit rose to HK$384.5 million from a restated HK$21.4 million a year ago. It ended the day up 10.2 percent to HK$5.40.
Other property shares such as Cheung Kong (Holdings) Ltd climbed 2.2 percent to HK$82.25 on the back of easing rate concerns.
H-shares were lifted by financial plays like China Life Insurance Co Ltd, which jumped 4 percent to HK$10.0, after earlier setting a record high, while Bank of Communications Co Ltd edged up 2 percent to HK$5.0.
Some mainland energy shares slipped, despite oil prices hovering near a seven-weak high. CNOOC Ltd slumped 3.2 percent to HK$6.15 after China's top offshore oil producer posted worse-than-expected second-half earnings.
Asia's largest listed bourse, Hong Kong Exchanges and Clearing Ltd, jumped 3.1 percent to HK$46.80, after earlier hitting a record high amid news that the Bank of China, the country's second-biggest lender, plans to raise $6 billion in an initial public offering in Hong Kong in June, according to the official Shanghai Securities News. The day's turnover was HK$29.4 billion (US $3.8 billion), up from Friday's HK$27.3 billion.
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