HK shares hit 8-mnth high; China shares lag
* HK stocks surge on short covering ahead of futures expiry
* China stocks lag ahead of fourday weekend
* Banks, refiners lead gains in both markets
(Updates to close)
By Parvathy Ullatil & Claire Zhang
HONG KONG, May 27 (Reuters) - Hong Kong shares shot up 5.3 percent to an eight-month high in resurgent volumes on Wednesday, with encouraging consumer confidence data from the United States shining the spotlight on a likely global economic recovery.
But the mainland markets lagged, with the Shanghai Composite Index .SSEC rising 1.7 percent, as caution prevailed ahead of a four-day weekend in China.
Hong Kong's market will be closed on Thursday for the Dragon Boat Festival holiday.
Chinese banks soared in both markets on optimism that new loans in the second quarter would reach 1.5 trillion-1.8 trillion yuan ($220 billion-264 billion). To complement the Chinese government's 4 trillion yuan economic stimulus package, banks lent a record 5.17 trillion yuan in the first four months of 2009 -- more than Beijing's minimum target of 5 trillion yuan for the whole of the year.
Minsheng Bank (600016.SS), the most active traded Shanghai A share climbed 6.85 percent to 6.71 yuan, while Bank of China (3988.HK), among Hong Kong's most actively traded stocks, jumped 9.5 percent to HK$3.23.
Refinery stocks PetroChina and Sinopec also found favour in Hong Kong and Shanghai as investors bet on a likely fuel price increase over the weekend, under China's newly adopted, more market-aligned pricing methodology.
ANOTHER GOOD MONTH FOR HK IN JUNE?
The benchmark Hang Seng Index closed up 893.71 points at 17,885.27 after climbing to 17,984.02 points intraday, its highest level since early October 2008.
The China Enterprises Index of top mainland companies advanced 5.4 percent to 10,202.25.
Turnover also picked up pace, jumping to a two-week high of HK$93.1 billion ($11.9 billion) from Tuesday's HK$56.3 billion.
Analysts attributed the strong volumes to derivative-related short covering ahead of May index futures contract expiry later on Wednesday. Continued...
