Hong Kong stocks advanced, with the benchmark posting its first weekly gain this month after China lowered a key interest rate , boosting the growth outlook. The Hang Seng Index climbed 3 per cent to 20,717.24 at the close on Friday, capping a 4.1 per cent gain this week. The Hang Seng Tech Index surged 4.7 per cent, while China’s Shanghai Composite Index added 1.6 per cent. Wuxi Biologics and China Merchants Bank were the biggest gainers on the Hang Seng Index, rising at least 7 per cent. Smartphone maker Xiaomi rallied 6 per cent after strong first-quarter results. Chinese banks cut the five-year loan prime rate (LPR), a reference for mortgage rates, to 4.45 per cent from 4.6 per cent, the most since the market-based borrowing cost was first made public in 2019, according to a statement by the People’s Bank of China. That exceeded the estimate of a 10 basis-point cut by economists tracked by Bloomberg. The one-year rate was left unchanged. The cut has bolstered the case for more policy loosening ahead, after official data showed that China’s economic activity contracted in April. The contraction reflected the impact of lockdowns implemented to contain the pandemic on industrial output and consumer spending. “The reduction is more than the market expected,” said Zhu Chaoping, a strategist at JPMorgan Asset Management in Shanghai. “The funding costs could decline even further, allowing debtors to save costs. More importantly, lower LPR may help boost demand in the property and land markets, which is critical to supporting local government financing. Given the persistent headwinds to growth, stronger fiscal stimulus is also expected.” Traders will also keep a close eye on a slew of earnings releases from bellwether companies from Alibaba Group Holding to Meituan next week. The results will provide an insight into whether the rebound in China’s tech stocks will be sustainable after top policymakers signalled a softening of the year-long crackdown. Among the biggest gainers, Wuxi Biologics advanced 7.9 per cent to HK$56.30, China Merchants Bank jumped 7.3 per cent to HK$49.10 and Sunny Optical Technology gained 7.3 per cent to HK$117.40. Xiaomi added 6 per cent to HK$11.74 after first-quarter revenue beat estimates. Chinese vaccine maker CanSino Biologics surged 9.8 per cent to HK$78 after the World Health Organization approved its Covid-19 vaccines for emergency use, paving the way for the product to enter the global market. Its Shanghai-traded stocks soared 12 per cent to 164.40 yuan.