The Hong Kong share market rose 2.39 per cent yesterday, buoyed by a resurgent HSBC, lower interbank rates and a firmer tone in many regional markets. The Hang Seng Index leapt 265.03 points to 11,314.46 as HSBC gained on merger and acquisition speculation in the wake of the planned Citicorp-Travelers Group merger. HSBC, which accounts for 26.7 per cent of the index, gained $9, or 3.89 per cent, to close at $240, its biggest one-day gain this year. On Tuesday, it put on $3 or 1.3 per cent. Merrill Lynch banking analyst Keith Irving said 'there seems to be a couple of strong rumours' concerning possible HSBC acquisitions. Property stocks also rallied, led by Cheung Kong, which rose 5.76 per cent to $55. The Hong Kong market rose in line with other regional markets. Tokyo recovered 2.49 per cent - its third straight gain - on hopes for tax cuts to spur the economy, while Bangkok led the region with a 3.32 per cent gain. The Hang Seng property sub-index rose 3.3 per cent to 14,562.26 points as investors aimed for the sector to ride the market's upward wave. Brokers said sentiment was boosted by a softening in interbank interest rates. The three-month interbank rate fell to 6.58 per cent from 6.8 per cent on Tuesday. The most influential mover of the day was HSBC, responsible for almost 30 per cent, or $1.81 billion of the market's turnover, as merger and acquisition speculation snowballed. Brokers said if the Citicorp-Travelers union was approved by United States regulators, it should spur other alliances between banks and financial houses or insurers. Thus speculation has tended to focus on potential partners for an HSBC grab in a deregulated banking environment in the US. 'The JP Morgan rumour reared its ahead again and now Wells Fargo is being mentioned,' Mr Irving said. HSBC's shares have gained 25 per cent this year, reaching a peak of $241 on March 27. They are 49.5 per cent above their year's low of $160.50, touched on January 15. 'Management has been pretty sharp about paying good value for acquisitions . . . I think they would wait for the price to correct before dipping into that market [US banks],' said Mr Irving. The Hang Seng finance sub-index rose 3.57 per cent to 16,664.02 points. There were 28 gainers and only two blue-chip losers - Hongkong Electric and conglomerate Wharf, which fell 2.07 per cent to $14.15 after the company's results for last year came in below expectations. Mainland-related plays also did well, with the H-share index rising 1.94 per cent to 685.07 points and the red-chip index gaining 2.1 per cent to 1,605.97 points.