Hong Kong stocks rose half a percent on Monday, helped by a strong US jobs report and with investors taking a weak US dollar as a cue to buy banks, property and China plays. "The weak US dollar helps Hong Kong and China competitiveness. Equity prices also look cheap to foreigners," said Louis Wong, research director at Phillip Securities.
The Hong Kong dollar is pegged to the US currency, which hit a fresh record low against the euro on rising worries about the bloated US current account deficit.
The blue chip Hang Seng Index ended 0.49 percent, or 66.54 points higher, at 13,561.49. Volume was above recent averages with HK $16.9 billion (US $2.17 billion) changing hands.
Index heavyweight HSBC (Holdings) helped buoy the index, rising 1.15 percent to HK $132. The bank, which accounts for over one-third of the weighting of the Hang Seng Index, tapped a fresh 52 week high.
Traders said market activity was also dominated by a continued strong flow of funds pouring into Hong Kong on speculation that China will revalue its currency.
Players were discounting a widely expected rise in US interest rates later this week.
Because of the currency link, Hong Kong rates usually follow US trends, but analysts say local banks may shun a rate increase this time because the banking system is awash in funds. Banks are also believed to be reluctant to raise rates because of weak loan demand.
"With a continued inflow of funds, Hong Kong markets will stay relatively firm and China-related counters in particular will definitely continue to see strong buying interest because of the anticipation of the yuan changes," said Alex Tang, research director, Core Pacific-Yamaichi International.
Property shares, which are typically sensitive to higher interest rates, gained some ground, with the Hang Seng properties sub index up 0.32 percent at 16,865.32.
Henderson Land Development Co Ltd was a top large cap property gainer, rising 1.05 percent to HK $38.40.
Red chips, or China stocks listed on the Hang Seng, were also top performers with mobile carrier China Unicom, shipping firm COSCO Pacific Ltd and oil giant CNOOC all rising more than one percent.
Other movers included bad loan specialist Silver Grant International Industries Ltd, which rose 15.27 percent to HK $3.775 after announcing it was selling up to 16.42 percent of the company to a unit of US financial services giant Citigroup.
Silvergrant said it would sell 169.45 million new shares at HK $2.63 each and a US $52.5 million convertible note to Citigroup Global Markets Ltd (CGML).
The share price represents a 19.69 percent discount to the closing price of HK $3.275 on November 3 and 13.64 percent to the average closing price of HK $2.596 for the 30 consecutive trading days to November 3.
Property and entertainment conglomerate Shun Tak Holdings Ltd, which is controlled by Macau casino mogul Stanley Ho, fell 1.67 percent to HK $5.90 after announcing it would buy a property project in Macau from Ho's family for HK $1.5 billion (US $192 million).
The company will pay HK $750 million in cash with the remainder to be in the form of new shares, it said in a statement.
China gold mining group Zijin Mining Group Co Ltd rose 1.67 percent to HK $3.05 on the back of rising world gold prices.
Gold tapped a fresh 16-year high in early Asian trade on Monday after the US dollar retested record lows against the euro, making dollar priced gold cheaper for holders of other currencies.