HONG KONG: Hong Kong stocks closed 1.47 percent higher Monday, reversing earlier losses as Shanghai soared on comments from Premier Wen Jiabao that China will move to boost mainland market confidence.
The benchmark Hang Seng Index added 272.66 points to 18,865.72 on turnover of HK$47.52 billion ($6.12 billion).
Traders followed the broad regional trend in the morning, giving up almost one percent on fears over the eurozone debt crisis and despite better-than-expected jobs figures from the United States.
However, Wen told a government meeting Saturday that Beijing will seek to raise confidence in the stock market, the official Xinhua news agency said, but gave no details.
Also adding to sentiment was data showing Chinese banks issued 640.5 billion yuan ($101 billion) in new loans in December, up from 562.2 billion yuan in November, after Beijing relaxed credit restrictions -- which could help support the market.
Oil giant CNOOC closed 1.46 percent higher at HK$15.30, Cathay Pacific was 2.43 percent up at HK$13.50 while Bank of China jumped 3.15 percent to HK$2.95 and HSBC added 1.26 percent to HK$60.25..
Chinese shares closed up 2.89 percent. The Shanghai Composite Index, which covers A and B shares, rose 62.49 points to 2,225.89 on turnover of 62.1 billion yuan.
"This rise was expected following the market's drop last week and the policy environment is conducive to supporting the market," Wang Ling, an analyst at Xiangcai Securities, told Dow Jones Newswires.
Coal companies led the gains on bargain hunting. The nation's largest miner, China Shenhua Energy, surged 7.2 percent to 26.01 yuan while Yunzhou Coal Mining jumped 8.2 percent to 23.26 yuan.
Banks also rose on hopes for further monetary easing by the government. China Minsheng Banking gained 2.5 percent to 6.18 yuan, while China Merchants Bank jumped 3.3 percent to 12.38 yuan.
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