HONG KONG (Reuters) - Shares in China and Hong Kong rose on Friday, led by strong gains in the banking sector after data showed China's new bank lending and money supply rose faster than expected in May, adding to hopes that the economy was stabilising.
By midday, the Hang Seng Index rose 0.6 per cent to 23,316.31 points, while the China Enterprises Index of the top Chinese listings in Hong Kong was up a similar amount.
The CSI300 of the leading Shanghai and Shenzhen A-share listings gained 1.3 per cent, while the Shanghai Composite Index was up 0.9 per cent at 2,070.27 points.
On the week, the Hang Seng benchmark was up around 1.6 per cent. The H-share index rose 1.5 per cent and is headed for its fifth-straight weekly gain.
Onshore China markets were also set for a winning week, with the CSI300 up 2.1 per cent and the Shanghai benchmark 2 per cent.
"The mainland market is experiencing a weak rebound, as a series of data has showed economy stabilised in May and people have expectations about more targeted easing measures," said Xiao Shijun, analyst at Guodu Securities in Beijing.
Chinese banks were buoyed by May lending data that beat expectations, with 870.8 billion yuan worth of new bank loans made, higher than a forecast of 750 billion yuan and above the previous month's 774.7 billion yuan.
Leading gains in the CSI300 was Ping An Bank, which surged 6.3 per cent to a 4-month high. China Minsheng Banking Corp and Industrial Bank gained 2.3 and 2.8 per cent, respectively.
All A-shares and H-shares of China's big four state banks rose in the morning, with Industrial and Commercial Bank of China up 1.4 per cent in Hong Kong.
Carmaker stocks also outperformed after Tesla Motors said it would allow others to use its intellectual property in hopes of speeding up development of electric cars by all manufacturers.
Warren Buffett-backed BYD gained 3.9 per cent in Shenzhen and 1.3 per cent in Hong Kong.
Weichai Power spiked 3.4 per cent in Hong Kong and 2.4 per cent in Shenzhen after the company said late on Thursday it obtained effective control over German forklift truck maker Kion.
Additional Chinese economic data due on Friday afternoon is likely to show factory output edged higher in May but investment growth slowed further, a Reuters poll showed.