Hong Kong and China shares surged on Monday as investors injected more funds into the market with U.S. dollar weakness expected to continue.
In Hong Kong, the blue chip Hang Seng Index rose as high as to 23,302.29, its highest since July 2008, before easing to 23,227.11 at the midday trading break, up 1.23%.
Turnover was HK$54.06 bln ($6.9 bln).
"Investors were cautiously optimistic after the recent strength in the (local) market and morning gains were decent," said Alfred Chan, chief dealer at Cheer Pearl Investment. "Appetite for local stocks remains strong as China markets are firm."
The China Enterprises Index of top locally listed mainland stocks was up 1.78% at 12,984.77.
Property stocks remained firm in anticipation that a land auction in Hong Kong on Tuesday could draw strong interest from developers. The Hang Seng property sub-index climbed 1.32% with Henderson Land Development Co up 1.9% and Sun Hung Kai Properties up 0.8%.
CNOOC Ltd rose to its highest since November 2007 after the company agreed to buy a third of Chesapeake Energy Corp's acreage in the Eagle Ford shale in South Texas for $1.08 bln. At midday, it stood at HK$16.78, up 4.35%.
Quality HealthCare AsiaLtd surged 21.6%, its highest since July 2001, before easing to HK$5.75, up 12.75%. The company said New Delhi-based Fortis Global Healthcare would buy its healthcare business for HK$1.52 bln ($195 mln).
Chinese coking coal logistics debutant Winsway Coking Coal Holdings, which raised $473 million in an IPO and is partly owned by China-focused private equity fund Hopu Investment, traded at HK$3.51, down from the issue price of HK$3.70.
SHANGHAI UP
China's key stock index rose 2.4% to a five-month intraday high by midday on Monday, buoyed by commodity issues such as Baoshan Iron & Steel Co (Baosteel) on positive corporate earnings and expectations of another flood of liquidity in global markets.
The Shanghai Composite Index was at 2,805.6 after closing up 3.1% on Friday.
Coal issues rallied, with Anhui Hengyuan Coal Industry and Electricity Power and Yanzhou Coal Mining Co up by their 10% trading limits.
Baosteel, the country's biggest listed steel mill, gained 3.5% after it said net profit for the first nine months of the year was likely to outstrip previous forecasts.
The index has broken through the half-year 125-day moving average, a level that local investors consider demarcates a bearish or bullish market. Analysts said the index had the potential to rise further to test the yearly 250-day moving average now at 2,888 points.
Traders said many investors were ploughing cash back into the market after waiting on the sidelines for the past two months.
"There has been a turnaround in market expectations. Previously the biggest drag was concern over the severity of property controls, but investors are more positive on the sector," said Cheng Yi, analyst at Xiangcai Securities in Shanghai. "The key factor is the downward trend of the dollar, sending big commodities soaring."
Marked weakness in the U.S. currency has helped boost commodities such as gold and oil, which are priced in dollars.
The U.S. dollar slid to a 15-year low versus the yen on Monday as soft jobs data fuelled expectations of more quantitative easing, while the IMF and G7 meetings produced nothing to avert a cycle of competitive depreciation.
China's stock market is still down 14% on the year, after government steps to clamp down on bank lending and a flood of property controls spooked investors.
Heavy weight banks helped bolster gains for the index on Monday, reversing their lacklustre performance for most of the past two months.
Industrial and Commercial Bank of China (ICBC) gained 1.7%, while Agricultural Bank of China rose 1.1%.
Volume jumped to 152 bln yuan ($22.78 bln) from 96 bln yuan on Friday.
