China H-shares close at two-week high on stimulus hopes, Hong Kong stocks climb

HONG KONG, March 24 Mon Mar 24, 2014 4:09am EDT

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HONG KONG, March 24 (Reuters) - China shares listed in Hong Kong extended gains on Monday to reach a two-week high on expectations the Chinese government could unveil stimulus measures after a weak factory survey.

The China Enterprises Index of the top Chinese listings in Hong Kong rose 2.8 percent to 9,695 points, its largest daily gain since Nov. 18.

The Hang Seng Index closed up 1.9 percent at 21,846.5, its best day since Nov. 18.

Short-covering by investors in the energy sector also lifted the H-share index, with heavyweight Petrochina up 5.5 percent in Hong Kong.

Ports-to-telecoms conglomerate Hutchison Whampoa fell 5.1 percent, its worst day since October 2011, after it announced Singapore state investor Temasek holdings agreed to buy a 24.9 percent stake in its retail business A.S. Watson for about HK$44 billion ($5.67 billion).

China's manufacturing activity contracted for the third straight month in March, a preliminary private survey showed on Monday, the latest in a series of weak readings on the world's second-largest economy. ($1 = 7.7588 Hong Kong Dollars) (Reporting By Alice Woodhouse; Editing by Kim Coghill)