Properties fuel HK shares, Sinoma, China Railway leap

(For Shanghai stock market reports, click [.SS])
(Updates to close)

By Rita Chang

HONG KONG, Dec 21 (Reuters) - Hong Kong stocks rallied
broadly on Friday as stabilising global equity markets lifted
investor confidence and fund managers sought to dress up their
portfolios before the year-end.

Local property developers lifted blue chips as the city's
ongoing inflation is expected to boost demand for real estate.

Mainland infrastructure plays dominated the day's trade as
newcomer China National Materials Co Ltd (Sinoma) (1893.HK)
rallied nearly 24 percent at one point, a day after its strong
debut.

China Railway (0390.HK) was also a star performer, as the
world's third-largest construction contractor leapt on talk that
it had won a bid for the high-speed Shanghai-to- Beijing railway
project.

Meanwhile, China's interest rate rise [ID:nPEK173091] on
Thursday was welcome news to investors, as it effectively removed
an overhang in the market.

"The Christmas rally is finally kicking in," said John
Schofield. "The psychology of the market is finally changing and
the latest interest rate increase (by China) is good news."

"It's been such a bad six to eight weeks ... we'll see a
reasonable uptick in the last week of the year."

The benchmark Hang Seng Index .HSI closed up 2.3 percent,
or 609.83 points, to end at 27,626.92, for a weekly gain of 0.2
percent.

The China Enterprises index of H shares .HSCE, or Hong
Kong-listed shares in mainland companies, gained 1.6 percent, or
249.03 points, to 15,981.81, up 0.2 percent for the week.

Mainboard turnover was HK$83.4 billion (US$10.7 billion)
compared to Thursday's HK$77.6 billion.

Investors embraced mainland infrastructure plays as proxies
for the country's sizzling growth.

China Railway (0390.HK), the day's most active issue, rallied
a further 6.8 percent to HK$9.57. The stock is set to be added to
the MSCI Global Standard indices on Friday.

Sinoma (1893.HK), the world's largest cement engineering
service provider, also shot up in heavy trade, surging 23.4
percent to HK$7.49.

Hong Kong on Thursday said its consumer price index rose 3.4
percent to 9-year highs in November [ID:nHKG372043], which should
boost the already robust demand for flats as residents seek a
hedge against inflation in hard assets such as real estate.

Among property shares, Cheung Kong (Holdings) (0001.HK)
gained 4.5 percent to HK$140.6 and Sun Hung Kai Properties
(0016.HK) raced up 4.2 percent to HK$160.2. The Hang Seng
property sub-index .HSNP shot up 4.2 percent.

Other large-cap gainers were Sinopec Corp (0386.HK), which
leapt 2.3 percent to HK$11.58. The country's No.2 oil and gas
producer said it had found gas in northeastern China with 26
billion cubic metres of recoverable reserves [ID:nPEK201791].

China Life (2628.HK), the country's top life insurer, raced
up nearly 3 percent to HK$40.6 and PetroChina Co Ltd (0857.HK)
scurried up 2.4 percent to HK$13.84.

China Mobile (0941.HK), the world's largest wireless telecoms
provider, rose 2.2 percent to HK$137.80.
(US$1=HK$7.8)
(Editing by Anne Marie Roantree)