Hong Kong shares rally

Hong Kong stocks rallied 2.64 percent on Friday in their biggest single-day percentage rise in two years as investors bought beaten-down shares across the board amid easing rate concerns and strong global equities markets.
Oil shares were among the top gainers, fuelled by higher crude prices and a string of analyst upgrades prompted by Thursday's news that offshore oil producer CNOOC Ltd and Husky Energy Inc found a giant gas field in China's first deep-water discovery.
The benchmark Hang Seng index finished up 407.57 points at 15,842.65 for a weekly gain of 1.4 percent. The China Enterprises index of H shares, Hong Kong-listed shares of mainland companies, soared 5 percent to 6,340.96 in its largest one-day percentage gain in two years. Turnover was HK$33.0 billion (US $4.2 billion), up from Thursday's HK$26.7 billion.
"Sanity's coming back into the market and people are bargain-hunting," said Kent Yau, deputy head of research at Core Pacific-Yamaichi International. "The correction in the past two days has been quite sharp. Basically, investors didn't look at the fundamentals - they just wanted to sell everything." Despite the day's strong gains, analysts warned of further correction.
"I can't rule out more downside in the near-term," said Renault Kam, director at Atlantis Investment Management (Hong Kong) Limited. "I can see more factors that can make the market turn negative. First is interest rates and second is the downgrade of corporate earnings due to the high material costs."
Among the day's top gainers were oil drillers and explorers, as investors saw rising demand for drilling and exploration services after CNOOC's gas field discovery.
Oil explorer CNPC (Hong Kong) shot up 7 percent to HK$3.425. China Oilfield Services Ltd, the drilling service arm of CNOOC Group, rocketed up 8.8 percent to HK$3.70. The company said Thursday it had won a bid for a new overseas contract in oilfield production.
Oil producer PetroChina Co Ltd powered up 4.8 percent to HK$7.7 and rival CNOOC vaulted 6.3 percent to HK$5.90. Mainland financials also gained further ground, led by China Life Insurance Co Ltd (China), which jumped 7.7 percent to HK$11.20.
Blue chip heavyweights HSBC Holdings Plc edged up 1.7 percent to HK$135.60 and mainland's top mobile carrier China Mobile (Hong Kong) Ltd gained 4.2 percent to HK$42.0.
The emerging markets cellphone arm of conglomerate Hutchison Whampoa Ltd, Hutchison Telecommunications International Ltd surged 9.1 percent to HK$12.0 after the company increased its stake in its Indian mobile business, according to an industry source.