Hong Kong stocks soared to a five-month high on Friday, as investors took their cues from Wall Street gains overnight and steady progress on the US-China trade deal, while profit taking drove China markets lower. The Hang Seng Index jumped 1.3 per cent to close at 28,225.42, the highest level since July 26. It also stood above the psychologically important 28,000-point mark, after trading resumed following the Christmas holiday. The benchmark plunged in early August amid worsening anti-government protests . It had traded sideways until earlier this month, when a temporary ceasefire in the trade war between the US and China lifted the market. That truce is soon expected to culminate in a phase one trade deal. A host of positive factors encouraged investors in Hong Kong to push stocks higher, according to Kenny Tang Sing-hing, chief executive of China Hong Kong Capital Asset. “The signing of the US-China trade deal is under way, and US stocks rose to new highs overnight. Traders are also looking forward to further monetary easing policies in China and increased government spending on infrastructure to boost the economy,” said Tang. Year-end “window dressing” effect could have also played a part in the gains, as fund managers adjust their positions, he added. Overnight on the Wall Street, stocks hit fresh highs on a strong rally in technology shares. The Nasdaq Composite Index climbed 0.8 per cent on Thursday. In China, markets gave up all gains in the morning and ended lower as profit taking kicked in, with investors ignoring upbeat November industrial profit data. The Shanghai Composite Index closed 0.1 per cent lower at 3,005.04. The Shenzhen Component Index declined 0.7 per cent, while the ChiNext Index of start-ups in Shenzhen tumbled by 1.5 per cent. Investors pocketed gains in semiconductors after a week of stunning gains. Securities brokerages also fell, as enthusiasm based on speculation over a trading tax cut and monetary easing failed to take place. Gold miners in Hong Kong advanced on the back of a recent rally in gold that has pushed the metal over US$1,500 an ounce. Gold has risen 18 per cent so far this year, as investors sought safe haven amid the US-China trade war and an outlook of lower interest rates globally. Zijin Mining, based in the southeastern province of Fujian, jumped 12.4 per cent to HK$3.72 per cent. China Gold International Resources rose 7.7 per cent to HK$6.83. Blue chips climbed broadly. Chinese gaming and social media giant Tencent Holdings contributed the biggest gains to the benchmark, rising 1.9 per cent to its highest level since May. Insurer AIA Group added 1.7 per cent to HK$80.75, while one of mainland’s biggest lenders China Construction Bank gained 2 per cent to HK$6.76. In China, suppliers to Tesla bucked the trend and rose. The US carmaker’s Model 3 is among the latest batch of electric vehicles that are exempted from purchase tax in China, a document released by the Ministry of Industry and Technology on Friday shows. Car parts makers Tianjin Motor Dies and VT Industrial Technology climbed by the daily 10 per cent limit to 4.51 yuan and 21.29 yuan, respectively.