Hong Kong shares ended sharply higher on Tuesday, buoyed by property counters, and as investors shrugged off political uncertainties after China finally stamped its authority on the city's electoral laws.
"The market has under-performed and it's set for a rebound," said Alex Wong, a research director at Rexcapital Asset Management. "Industrial stocks should fare well on the back of a reviving United States economy".
Traders said investors had largely ignored news that China's parliament had ruled that it has the power to decide whether Hong Kong needs electoral reforms, dealing a blow to aspirations for democracy in the territory.
Critics had raised fears that the move could stymie the pro-democracy movement and push back the prospect of full and free elections by years.
The benchmark Hang Seng Index ended up 1.22 percent, or 155.21 points, at 12,886.97, closing above 12,800 for the first time in more than two weeks. The index chalked up gains of as much as 1.65 percent during the day.
Despite a holiday-shortened week, market volume was heavy at HK $17.44 billion (US $2.24 billion), compared with a 20-day moving average of HK $16.1 billion. Property shares led the pack higher, with the property sub-index rising 1.71 percent to 16,846.
Cheung Kong Holdings Ltd, the property flagship of tycoon Li Ka-shing, rose 1.87 percent to HK $68.25 while its rival Sun Hung Kai Properties Ltd gained 2.03 percent to HK $75.50.
Exporters, such as consumer goods trading firm Li & Fung Ltd and mini-motor maker Johnson Electric Holdings Ltd, both fared well on the back of a robust Wall Street.
Li & Fung rose 2.82 percent to HK $12.75 while Johnson Electric gained 2.34 percent to HK $8.75.
The pair both ship a large chunk of their goods to the world's largest economy, the United States, which in the past few days has reported some robust economic data.
Index heavyweight China Mobile (Hong Kong) Ltd also helped prop up the market. The firm, China's largest wireless phone carrier, jumped 3.49 percent to HK $23.70.
China plays, led by China Eastern Airlines Corp Ltd and Zijin Mining, outran the broader market, bolstered by strong results.
The H-share index of Hong Kong-listed Chinese companies jumped 2.26 percent to 4,968.74.
"Overseas funds are snapping up China plays on evidence that Chinese companies are posting strong profit growth," said Mark Wan, head of research at Tanrich Financial Group.
Shares in Fujian Zijin Mining Industry Co Ltd surged 11.5 percent to HK $6.30 after the firm posted a 127 percent jump in 2003 profit and revealed a plan to issue bonus shares.
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