Hong Kong shares close up 3.5 pct as China stocks surge on stimulus plan UPDATE

Share prices closed sharply higher led by China stocks after Beijing unveiled a 4 trln yuan economic stimulus package to counter a negative external environment.

Construction-related firms soared after Beijing announced increased infrastructure spending, while mainland banks and property firms jumped as China confirmed that it has shifted to easier monetary policy.

Commodity stocks surged on hopes that the stimulus package will boost demand for energy and raw materials.

Aluminum Corp of China (Chalco) leapt nearly 19 pct after it said it plans to repurchase up to 10 pct of its Hong Kong-listed H-shares.

Hong Kong-based trading firm Li & Fung was down 5.8 pct after news that it has frozen hiring and is considering cutting some jobs as it tries to cope with a global economic downturn.

Personal-computer maker Lenovo slumped 13.5 pct as its steep second-quarter earnings drop prompted broker downgrades.

The Hang Seng index closed up 501.2 points or 3.52 pct at 14,744.63, off a low of 14,453.62 and high of 15,147.96.

Turnover was 60.71 bln hkd.

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