Hong Kong stocks rallied 1.69 percent on Monday to a fresh 5-1/2-year peak as rate-sensitive property and banking shares such as HSBC Holdings Plc. scaled new highs on expectations that interest rates have peaked.
The China Enterprises index of H-shares, or Hong Kong-listed shares in mainland companies, rode to fresh 8-1/2 year highs on the back of strong financial plays. H-shares ended the day up 3.05 percent at 7,371.62.
Mainland telecoms added to blue chip gains amid speculation of potential investment by foreign carriers, helping lift the Hang Seng index to settle at 17,301.79, its highest close in 5-1/2 years. China Mobile (Hong Kong) Ltd gained 3.5 percent to HK$46.5 and China Netcom Group Corp (Hong Kong) Ltd jumped 4.8 percent to HK$15.35 after SK Telecom Co, South Korea's top mobile phone operator, said on Thursday it was eyeing investments in Chinese telecoms operators.
A Hong Kong newspaper report on Thursday also said that foreign carriers were eyeing stakes in China Unicom Ltd, the smaller of China's two huge cellular operators.
The anticipated end of the US Federal Reserve's interest rate-raising cycle lifted Hong Kong banks and properties, with market heavyweight HSBC climbing 2.6 percent to HK$140.80, just 10 cents shy of a record high set earlier in the day.
Standard Chartered Plc also set a new peak before easing slightly to HK$212.2, up 3 percent.
The Hang Seng property sub-index recorded fresh 8-1/2-year highs before finishing up 1.32 percent at 22,076.89. Wheelock & Co Ltd gained 2.7 percent to HK$15.4, in earlier trade nearly matching 8-1/2 year highs.
New World Development Co Ltd climbed 3 percent to HK$15.1, after earlier tapping six-year peaks.
"Maybe this week we'll see a pause in interest rate hikes," said Yuihama Hirokazu, Asia strategist at Daiwa Institute of Research Ltd "such an expectation was the largest contributor to the increase of the Hong Kong market."
Speculation that the US central bank could end its interest rate raising campaign with just one more rate increase at its policy-setting meeting on Wednesday has stoked global stock market rallies.
Mainland lenders and insurers lifted H-shares, with China Life Insurance Co Ltd (China) surging nearly 7 percent to a record close of HK$11.7, and Bank of Communications Co Ltd gaining 2.6 percent to HK$5.
"It's a rebound," said Jerry Lou, China strategist at Morgan Stanley, referring to H-shares, which had retreated sharply after China raised interest rates in late April. "There's no positive surprises, but the money keeps on coming in."
Jiangxi Copper Co Ltd shot up 8.5 percent to a new closing high of HK$9.55 after Shanghai copper futures soared by their daily trading limit to match a record set in April.
Turnover was high at HK$41.5 billion (US $5.3 billion), up 45 percent from Thursday's HK$28.6 billion. Hong Kong markets were closed on Friday for a holiday.