Hong Kong and Shanghai shares gain

Hong Kong shares rose 1.97 percent Monday, in line with regional markets, as dealers welcomed a report that the International Monetary Fund was planning to hand Italy an $800 billion bailout. The benchmark Hang Seng Index added 348.33 points to close at 18,037.81 on turnover of HK$41.16 billion ($5.29 billion).
The market was also given a boost by retails sales data from the United States over the post-Thanksgiving weekend showing a record amount of money spent. Italy's La Stampa newspaper said on Sunday that the IMF could provide up to 600 billion euros to help Rome service its huge repayments.
The cash would give Prime Minister Mario Monti 12 to 18 months to implement urgent budget cuts and growth-boosting reforms "by removing the necessity of having to refinance the debt", the paper said, citing fund officials. La Stampa added that the IMF would guarantee rates of four or five percent on the loan - far better than the yields above seven percent Italy has to pay on commercial markets. "Hong Kong stocks were already oversold, so the IMF news triggered the rebound," said Castor Pang, research head at Core Pacific-Yamaichi. "However, given that newsflow out of Europe had dominated trading, no one can say with certainty that the next piece of news will be positive," he said. However, the IMF later said it was not in discussions with Rome over a financing package, although that had little impact on equities.
In the United States sales rose 16 percent year on year to a record $52.4 billion over the Black Friday shopping weekend. The news lifted sentiment as many Asian companies rely heavily on the crucial year-end sales in the world's biggest economy. Exporter Li & Fung jumped 10.4 percent to HK$15.28 and shipping firm China Cosco rose 4.6 percent to HK$3.42.
Chinese shares closed up 0.12 percent. The Shanghai Composite Index, which covers both A and B shares, gained 2.81 points to 2,383.03 on turnover of 46.4 billion yuan ($7.3 billion). The benchmark index lost 1.50 percent last week, marking the third straight weekly decline. Nanjing Securities analyst Wen Lijun told Dow Jones Newswires that investors were watching a key central government meeting on the economy, expected in December, for cues.
The official China Securities Journal reported Monday that the upcoming meeting would affirm measures to "fine-tune" monetary policy, widely taken as a signal of easing. Heavyweight financial stocks were among the biggest winners, though gains were modest. Industrial and Commercial Bank of China edged up 0.24 percent to 4.23 yuan while insurer Ping An rose 0.84 percent to 36.04 yuan.