Hong Kong's benchmark stock index jumped the most in more than three months, led by financial shares, after better-than-expected corporate results eased concern that credit-market losses will widen.
HSBC Holdings Plc had its biggest climb in four months after a newspaper said the bank held talks to lure investment from China's sovereign wealth fund and Citigroup Inc, the biggest US bank, reported a smaller-than-estimated loss. Industrial & Commercial Bank of China Ltd advanced after the country's banks lowered their average bad-loan ratio, Bloomberg News reported. Sun Hung Kai Properties Ltd surged on speculation falling apartment completions will allow Hong Kong real-estate developers to raise home prices.
"We are seeing a short-term recovery in market sentiment as better news flow comes out, helping to calm people down a bit," said Jacky Choi, a fund manager at Value Partners Ltd, which manages about US$6 billion.
The Hang Seng Index added 658.71, or 3 percent, to close at 22,532.90, its biggest surge since April 2. A gauge tracking financial shares accounted for 52 percent of the Hang Seng's advance yesterday. The Hang Seng China Enterprises Index, which tracks so-called H shares of Chinese companies, gained 2.8 percent to 12,458.81.
The main Hang Seng Index has lost 19 percent this year after raw-material prices soared and the world's largest banks and securities firms lost more than US$447 billion in writedowns.
HSBC, Europe's biggest bank, rose 4.1 percent to HK$124.90(US$16), its largest jump since March 25. The bank has talked to China Investment Corp to attract investment from the Chinese sovereign fund.
