Stocks surged 4.89 per cent yesterday as foreign funds flowed into the market on the first day of trading after the long holiday weekend.
The Hang Seng Index closed up 541.89 points at 11,614.87.
Property developers and financial stocks led the gains. The share prices of HSBC and Cheung Kong are both approaching levels they reached in the 1997 bull market.
The market was boosted by gains in other stock markets during the holiday and the prospect of a breakthrough in Beijing's application to join the World Trade Organisation (WTO) during Premier Zhu Rongji's US trip.
'The Hong Kong market was affected by two things - the global equity rally . . . and China's possible entry to the WTO,' said DBS Securities director of research Frederick Tsang.
A property boost and British Telecom's investment in mobile phone company Smart Telecom added incentive, brokers said.
