Hong Kong stocks closed 1.29 percent higher on Monday following a late rally last week on Wall Street, where investors shrugged off concerns over ongoing instability in Iraq and Ukraine. The benchmark Hang Seng Index reversed three straight days of losses, adding 314.61 points to 24,646.02 by close of play on turnover of HK$65.7 billion ($8.48 billion).
Last week was a somewhat torrid one for Asian investors as fears mounted over both Iraq and Ukraine. But on Monday buyers seemed to take their cue from Wall Street, where traders were unfazed by US President Barack Obama's decision to conduct limited airstrikes against extremists in Iraq.
Hong Kong investors were also buoyed by figures released over the weekend showing China's annual inflation rose by a stable 2.3 percent in July, allowing authorities space to further stimulate growth. The Chinese government also said Friday that exports jumped 14.5 percent year-on-year to $212.9 billion in July, accelerating from June's gain of 7.2 percent and beating expectations of 8.0 percent.
Shares in Orient Overseas (International) Ltd jumped 4.7 percent to HK$42.80 after the container shipping operator said it turned profitable in the first half on the back of higher shipping volumes. Internet giant Tencent rose 2.19 percent to HK4132.6 while WH Group, the world's biggest pork producer and a relative newcomer to the bourse, continued its upward march since listing by rising 4.8 percent to $6.98.
"It is expected that the data on retail sales, industrial production and fixed asset investment for July released on Wednesday could show the progress of the economic recovery," UOB's Kay Hian told Dow Jones Newswires. Chinese shares closed up on Monday, also on hopes for more government policies to boost the domestic economy after the benign inflation data, dealers said.
The Shanghai Composite Index rose 1.38 percent, or 30.22 points, to 2,224.65 on turnover of 126.1 billion yuan ($20.5 billion). The Shenzhen Composite Index, which tracks stocks on China's second exchange, gained 1.44 percent, or 16.95 points, to 1,191.36 on turnover of 149.2 billion yuan. "The CPI and trade figures confirmed the domestic economy continued to recover mildly, leaving room for authorities to issue more policies to achieve its 7.5 percent (GDP growth) target," Central China Securities analyst Zhang Gang told AFP.
On the Shenzhen market, TA&A Ultra Clean Technology, which makes anti-static products, soared by its 10 percent daily limit to 23.78 yuan while Absen Optoelectronic also jumped 10 percent to 47.01 yuan. Financial plays also outperformed in Shanghai. China Life Insurance gained 2.48 percent to 15.29 yuan while ICBC advanced 1.42 percent to 3.56 yuan.