HONG Kong's benchmark stock index rose the most in three weeks, led by banks, after HSBC Holdings Plc said first-quarter profit increased amid fewer provisions.
Anhui Conch Cement Co and Angang Steel Co advanced on expectations China's strongest earthquake in 58 years will increase demand for redevelopment. The quake, which killed more than 12,000 people, struck southwest Sichuan Province on Monday.
"Infrastructure-related stocks are seen to be good due to the necessary reconstruction" after the quake, said Pauline Dan, the chief investment officer at Samsung Investment Management Hong Kong Ltd, which helps manage US$80 billion.
The Hang Seng Index closed up 2 percent at 25,552.77 on the first day of trade after a three-day public holiday weekend, the biggest advance since April 21. The Hang Seng China Enterprises Index, which tracks so-called H shares of Chinese mainland companies, added 2.3 percent to 13,977.91, Bloomberg News said.
PCCW Ltd, the biggest phone carrier, and Cheung Kong Infrastructure, fell after HSI Services Ltd said last Thursday they will be dropped from the Hang Seng Index starting next month, to be replaced by Tencent Holdings Ltd and Aluminum Corp of China Ltd, which surged yesterday.
HSBC surges
HSBC Holdings, Europe's largest bank, rose 2 percent to HK$135.50 (US$17.38), the biggest rise since March 25. First-quarter profit increased as it set aside a less-than-estimated US$3.2 billion to cover bad loans in the United States, it said.
"Core profits are going up and dividends will be paid," said Andrew Clarke, a trader at SG Securities Hong Kong Ltd.
Industrial & Commercial Bank of China, the nation's biggest listed lender, added 3.2 percent to HK$6.10. China Construction Bank Corp, the No. 2, rose 4.9 percent to HK$7.12.
The 7.8 magnitude quake struck 90 kilometers from the central city of Chengdu, home to 11 million people and the capital of Sichuan Province.
Anhui Conch, China's biggest cement maker, rose 5.3 percent to HK$65.80. Angang Steel, China's second-largest steel mill by market value, advanced 7.6 percent to close at HK$21.85.