Hong Kong stocks advanced to their highest level in more than three weeks on Thursday, gaining 0.25 percent, as investor sentiment brightened after several weeks of worries over interest rates and bird flu.
"Basically it's quiet. But without further surprises we are kind of approaching the bottom. Some of the stocks have been oversold," said Herbert Lau, chief investment officer at CASH Asset Management.
The blue chip Hang Seng Index ended up 35.78 points at 14,633.33. Volume was slightly below recent averages, with HK$17 billion ($2.1 billion) worth of shares exchanged.
Dealers said investor sentiment had turned more positive since October when shares fell by over 1,000 points on interest rate concerns. But background worries over bird flu, a strong US dollar added to general caution.
Sentiment may also be dictated by the upcoming listing of the Link REIT later this month, Hong Kong's first, and the world's largest-ever property trust.
China Construction Bank, which listed late month with a US $8 billion IPO, rose 2.04 percent to HK$2.50 after its inclusions in the MSCI index, a benchmark used by fund managers for stock selection.
Dealers said talk of a possible yuan revaluation ahead of a US presidential trip to China later this month was also supporting China plays. US President George W. Bush is due to visit China from November 19 as part of a trip to Asia. He urged Beijing on Tuesday to do more to allow the yuan to strengthen and said the trade imbalance between the two countries was "bothersome." The China enterprise stocks index, better known as H-shares, rose 0.59 percent to 4,949.79.
Hang Seng heavyweight and China's largest cellular provider China Mobile (Hong Kong) Ltd rose 0.7 percent to HK$35.85.
Henderson Investment Ltd jumped 19.7 percent to HK$12.75 on resuming trade after its parent Henderson Land Development Co Ltd offered HK$9.9 billion ($1.27 billion) to privatise the firm.
Henderson Land fell 0.73 percent to HK$34.15 even though most analysts said the move would help Henderson to streamline its operations.
Other property shares stabilised after facing pressure on growing expectations that interest rates will rise to five-year highs by early next year. The city's top developer, Sun Hung Kai Properties, rose 0.27 percent to HK$73.35.
Shares in Hong Kong conglomerate First Pacific Co Ltd rose 6.36 percent to HK$2.92 after it said it would make a buy out offer for pineapple producer Del Monte Pacific Ltd for $411.90 million as it expands its food business.
First Pacific said in a statement that it had agreed to buy 39.72 percent of Del Monte Pacific from Del Monte Holdings Ltd for $163.63 million, or $0.3818 per Del Monte Pacific share.