HONG KONG (Nikkei Markets) -- Hong Kong shares climbed to a fresh five-month high on Monday, spurred by optimism ahead of the year-end over monetary policy support in China and Sino-American trade relations.
The Hang Seng Index added 0.3% to 28,319.39 after falling as low as 28,165.13 in the early minutes of trading. Financial heavyweights AIA Group and Ping An Insurance Group added 1.5% and 0.7%, respectively.
Stocks worth 76.92 billion Hong Kong dollars ($9.9 billion) changed hands during the day. Hong Kong's stock market will close at noon on Tuesday and will be shut on Wednesday for New Year's Day.
The Hang Seng Index has been hovering near five-month highs as trade tensions between the world's largest economies have de-escalated. Markets are looking forward to the signing of the first phase of a U.S.-China trade deal that was agreed on by both sides earlier this month. The preliminary agreement, which follows 18 months of escalating trade tensions between the two nations, involves the rollback of some U.S. tariffs on Chinese goods and a pledge by Beijing to buy more American agricultural produce.
"I don't think it will be difficult for the market to sustain the current climb," said Alvin Ngan, an analyst at Zhongtai International Securities. He added, however, that a further upside for the Hang Seng Index in 2020 will likely be limited to about 7%.
Meanwhile, expectations for monetary support from Chinese authorities have also gathered pace as Asia's largest economy grapples with a slowdown. The People's Bank of China on Saturday said commercial banks should replace old benchmark lending rates with the Loan Prime Rate to price loans issued before Jan. 1, 2020.
In the mainland, the Shanghai Composite Index climbed 1.2%, while the yuan traded onshore added 0.2% against the dollar to 6.9826.
Powerlong Commercial Management Holdings climbed to HK$10.06 in its maiden trading session in Hong Kong, up from its initial public offering at HK$9.50. Powerlong Commercial Management is a spin off from Hong Kong-listed Powerlong Real Estate Holdings. Powerlong Real Estate declined 0.8%.
Bank of Guizhou, also making its debut in the city on Monday, dropped to HK$2.30 from its IPO price of HK$2.48. The lender had earlier raised HK$5.46 billion in gross proceeds from its IPO.
Diversified conglomerate Wheelock slipped 0.1%. Its unit Wheelock Properties on Monday said it will lease 500,000 square feet of land in Hong Kong to non-governmental organizations to provide transitional. Transitional housing is short-term accommodation provided to help vulnerable households transition into longer-term housing.
Mobi Development jumped 7.6% after the maker of wireless communication antennas and base station radio frequency subsystems said its unit won a 70% share in Chinese telecommunication equipment maker ZTE's 5G antenna project procurement bid. ZTE shares in Hong Kong ended unchanged at HK$23.25.
C-Mer Eye Care Holdings rose 3.7% after the ophthalmic services provider said it acquired land use rights in Shenzhen for 209 million yuan ($29.9 million).
Food retail chain Best Mart 360 Holdings added 6.9% after saying it has set up an entity called Shenzhen Best Mart 360 Commerce to expand its retail business in China.
-- Benny Kung