Hong Kong stocks climb 1.58 percent

HONG KONG: Hong Kong shares closed 1.58 percent higher on Wednesday with dealers cautiously optimistic European leaders will be able to agree a solution to the eurozone debt crisis.

The benchmark Hang Seng Index rose 298.35 points to 19,240.58 on turnover of HK$51.66 billion ($6.65 billion).

Eyes are on a two-day summit that begins on Thursday with expectations growing that a plan for fiscal integration set out by the leaders of France and Germany will be largely agreed on.

Confidence was lifted by reports that European officials were discussing plans to possibly implement two separate bailout funds to tackle the region's debt crisis.

Chinese banks, insurers and property developers outperformed on hopes of more policy easing by Beijing after last week's cut in the reserve requirement ratio -- the amount of money banks must hold in reserve.

ICBC, the country's largest bank, rose 2.9 percent to HK$4.91, while China's largest insurer China Life gained 4.3 percent to HK$21.75. China Overseas Land, the largest Hong Kong-listed mainland developer, was up 2.1 percent at HK$14.36.

Clothing retailer Esprit, which derives most of its business from Europe, rebounded 0.6 percent to HK$10.78 after diving 10.5 percent Tuesday due to the unexpected resignation of its chief financial officer.

Chinese shares added 0.29 percent. The Shanghai Composite Index, which covers both A and B shares, ended up 6.82 points at 2,332.73 on turnover of 40.0 billion yuan ($6.3 billion).

"Investors are increasingly worried that the (Chinese) economy will slow down significantly, and the overall mood of the market is not optimistic," Li Lei, an analyst at Gold State Securities, told Dow Jones Newswires.

The economy grew an annual 9.1 percent in the third quarter this year, slowing from the 9.5 percent in the second quarter and 9.7 percent in the first.

Insurers led the gains on bargain buying. Ping An Insurance rose 3.0 percent to 37.92 yuan and China Pacific Insurance gained 1.7 percent to 19.68 yuan.

But cement makers slid on shrinking demand. Huaxin Cement fell 2.2 percent to 14.11 yuan, while Fujian Cement lost 2.3 percent to 8.40 yuan.