HONG KONG (Nikkei Markets) -- Hong Kong shares rose for a third day, helped by an extended rebound in technology companies and gains in financial heavyweights amid expectations that U.S. interest rates are poised to rise.
The Hang Seng Index added 1.1% at 28,965.29 on Monday, with some analysts expecting more upside before the end of the year. Internet major Tencent Holdings climbed 2.9% in for the third consecutive day, recouping losses of as much as 1.2% earlier in the day.
Apple suppliers AAC Technologies Holdings and Sunny Optical Technology Group climbed 2.8% and 2.7%, respectively. London-headquartered heavyweight lender HSBC Holdings added 2% in its best single-day performance since July.
Huarong International Securities analyst Jackson Wong expects the Hang Seng Index to extend gains to 29,000 to 30,000 points before year-end.
The Hang Seng China Enterprises Index also rose, gaining 1.3%, led by Ping An Insurance Group and New China Life Insurance that advanced 3.8% and 3.4%, respectively.
"The A-share market sentiment is weighing more on the Hong Kong equities than the impact from U.S. equities," said Wong. "I don't think Beijing's policy on regulation and financial sector deleveraging will be stricter, and as soon as policy uncertainties are cleared, Chinese equities are likely to have a rebound."
On the mainland, the Shanghai Composite added 1%, while its Shenzhen counterpart rose 1.5%, with both indexes posting their best single-day gains since August. Onshore traded yuan was little changed against the U.S. dollar at 6.6172.
Data released over the weekend showed China's retail inflation in November fell to 1.7% from 1.9% in October, below estimates compiled by Bloomberg. The producer price index decelerated to 5.8% from 6.9% in October.
The Nikkei Asia300 Index added 0.8% after two of the three major U.S. equity benchmarks closed at record highs on Friday. Global markets are focusing on the U.S. Federal Reserve's policy review this week, when the central bank is widely expected to raise rates and possibly signal further increases in 2018.
Among smaller stocks, Convoy Global Holdings was in the news as it said it appointed Johnny Chen as its executive director and interim chairman after the suspension of three executive directors, including Chairman Wong Lee-man, following their arrest by Hong Kong's anti-graft agency.
Convoy Global shares have been suspended from trade since Dec. 7, pending an announcement. At its last traded price of 16.7 Hong Kong cents, the financial-services company has a market capitalization of about HK$2.50 billion ($320 million).
Honghua Group fell 1.6% after the drilling-rig maker said it expects losses for the year ending Dec. 31 to double from the year-ago period.
Mold and plastic component maker TK Group Holdings slid 2.5% after saying it recently invested about HK$23.8 million in Precision Robotics.