Banks Push Hong Kong, China Higher

Hong Kong and Shanghai shares rebounded Monday with banks recovering from steep losses as worries about Dubai's debt problems eased and as Chinese authorities reassured investors they would stick with economic stimulus.

Brokers said sentiment remained cautious though worries over Dubai's debt issue had eased. "Since we don't expect the Dubai issue to have much immediate impact, the market's sentiment is very cautious and the focus is now on the US dollar," said Conita Hung, head equity research from Delta Asia Financial.

The index can test the upside at the 22,000 level if dollar weakness remains, she added.

Analysts said the sluggish market debut in Hong Kong signalled a weak investor appetite for a casino gaming company with a high valuation and an uncertain outlook. Its closest rival Wynn Macau rose 3.6 per cent to HK$9.57.

China's key stock index rose 3.2 per cent Monday, posting a third consecutive monthly gain, led by consumer-related and brokerage shares after authorities reassured investors they would stick with economic stimulus, sparking a market rebound after last week's slide.