Hong Kong stocks rose 2.9 percent on Friday, as US stock futures pointed to a recovery on Wall Street and talk swirled of another round of rate cuts in China, sending mainland lenders soaring. But the main index finished the week 6.5 percent lower, its worst weekly performance in three weeks, on bleak economic data, job losses at top banks and the US auto industry's woes.
China has cut the reserve requirement at its banks twice this year compared with three reductions in the lending rate since September. China Construction Bank, which had fallen 12.7 percent in the previous three sessions on talk that Bank of America may dilute some of its holding in the Chinese lender, jumped 6.1 percent. No 2 lender Bank of China climbed 5.9 percent.
The benchmark Hang Seng Index ended the session up 360.64 points at 12,659.20 after opening nearly 4 percent lower. The index, which has dropped 55 percent so far this year, had risen more than six percent earlier in the day, partly on hopes that a solution may be found to problems facing US banking giant Citigroup, which lost half its market value this week.
The Dow Jones futures were up 3.3 percent at 0830 GMT, sparking rebounds in other regional markets. Turnover jumped to HK$50.4 billion ($6.5 billion) from HK$44.6 billion on Thursday. Average turnover this week, at around HK$43 billion, was the weakest in at least a year, said brokers, falling 23 percent from the third quarter average of over HK$61 billion.
Property counters, which were battered by a four-day sell-off in Hong Kong, roared back to life with strong gains. Hang Lung Properties jumped eight percent, while Henderson Land rallied 4.5 percent. The China Enterprises Index of top locally listed mainland Chinese firms gained 3.8 percent to end at 6,424.97.
Heavy truck manufacturer Sinotruk (Hong Kong) soared 8.2 percent after it said it was in preliminary talks with a third party on a possible long-term partnership deal, which might eventually bring in an important strategic investor.
Cement makers notched up strong gains, as some investors resumed buying on hopes that China's $586 billion stimulus plan will boost the construction sector, propping up demand for the building material. China National Building Materials rallied 23.7 percent, while Shanshui Cement shot up 8.6 percent. Aid package hopes also fuelled a 15 percent rally in Maanshan Iron & Steel and a nine percent jump in Angang Steel.