HSI Kicks Off Short Week On Winning Note

Hong Kong shares rallied more than 1 percent on Monday following a strong lead from Wall Street, with market heavyweight HSBC boosted by news its biggest stakeholder had increased its investment in the firm.

The Hang Seng Index rose 1.04 percent, or 240 points, to 23,476.

HSBC, which had struggled recently, jumped 9 percent to close at HK$30.8, on news that Ping An Insurance Group had lifted its stake in the bank on confidence it will return to profit and resume paying dividends.

The bank was included in a group of lenders said to have allowed fraudsters to transfer millions of dollars around the world, and on fears it could be added to a Chinese list of firms deemed a threat to national security.

SMIC was down sharply in the early going following weekend media reports that the US has slapped export controls on the Chinese chipmaker, but it later pared the losses and ended nearly 4 percent lower at HK$17.86.

Across the border, the benchmark Shanghai Composite Index dipped 0.06 percent, or 1.88 points, to 3,217, while the Shenzhen Composite Index on China's second exchange eased 0.75 percent, or 16 points, to 2,126.

Asian stocks were generally higher, but advances were limited by worries about fresh virus spikes and the re-imposition of economically damaging containment measures.

Tokyo, Mumbai, Seoul, Bangkok and Taipei were all 1 percent higher. Singapore and Manila put on 0.4 percent each, while Wellington was flat.

Investors will now be keeping an eye on Monday's resumption of trade talks between Britain and the European Union, hoping for a breakthrough despite feuding over a controversial UK bill that threatens to scupper a deal.

London and Brussels say a free-trade agreement must be struck by mid-October to allow time for it to be ratified before coming into force on January 1. (AFP)