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Stronger Data From Chinese Mainland Give Boost To HK Stocks

HONG Kong stocks rose yesterday as investors cheered better-than-expected data from the Chinese mainland, which bolstered widespread expectations for a rapid recovery in the world's third-largest economy.

The official purchasing managers index as well as a separate PMI published by CLSA were above the boom-or-bust 50 mark in May, laying to rest doubts about the pace of China's economic recovery and triggering strong buying in mainland resources and industrial counters.

The strong data also helped investors overcome their jitters ahead of the largest ever United States manufacturing bankruptcy.

"The sentiment is so positive and everybody is so optimistic that they can look at this GM news and think this the last bit of really bad news we will get out of this crisis," said Jackson Wong, an investment manager at Tanrich Securities.

Mainland insurers rose with the extended rally in the mainland markets, up nearly 50 percent so far this year, seen boosting their investment income. China Life jumped 6.6 percent to HK$30.10 (US$3.88) in Hong Kong.

The Hang Seng Index rose 4 percent or 717.59 points at 18,888.59, its highest closing level since September 2008.

The gauge rose 17 percent in May, its biggest single-month advance in a decade, and is currently trading at nearly 17 times the estimated earnings of its constituents in 2009.


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