HK shares close at 7-?month high in liquidity bounce

Hong Kong shares rallied 3.1 percent to close at a 7-?month high, in its third straight day of gains on Tuesday as signs of an early turnaround in the global economy lured investors in droves.

Shares in HSBC shot up 6.3 percent to finish at four-month closing high of HK$68.35, partly helped by news that the Britain-based lender and Hong Kong's Bank of East Asia <0023.HK> are set to become the first foreign banks to issue yuan bonds in Hong Kong.
Bank of East Asia was up 5.6 percent at HK$24.55, while another London-based lender Standard Chartered put on 7.4 percent.

The benchmark Hang Seng Index ended up 521.12 points at 17,544.03, its highest closing level since October 2008.

"This rally is entirely liquidity-driven. Technically, the index closed above its 250-day moving average, which is a good sign, but fundamentally it is pretty overvalued," said Peter Pak, vice-president at BOCI Research.
The gauge has surged nearly 55 percent from the 2009-low it plumbed in March.

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