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Hong Kong shares up 0.7% by close

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(Globalpost/GlobalPost)

Hong Kong shares closed 0.7 percent higher on Friday after China posted upbeat industrial output data for July that hit a five-month high.

The benchmark Hang Seng Index gained 151.68 points to 21,807.56 on turnover of HK$44.13 billion (US$5.70 billion).

China's key industrial production growth accelerated to a five-month high of 9.7 percent in July, the government said.

Authorities also announced steady expansion in retail sales and fixed asset investment, and a benign inflation figure of 2.7 percent, unchanged from last month.

"Taken with Thursday's better-than-expected trade data, there's more reason to be positive on the economy," Minsheng Securities analyst Zheng Ping told Dow Jones Newswires.

Exports and imports, which had contracted in June, rebounded last month, growing 5.1 percent and 10.9 percent year-on-year respectively, according to Customs figures on Thursday.

Mainland plays were strong performers in Hong Kong after the slightly lower than expected inflation reading raised hopes China's leadership will introduce new measures to support slowing economic growth.

The Hang Seng China Enterprises Index rose 1.2 percent, its biggest one-day gain in more than two weeks. Shares of China Life rose 1.3 percent to HK$18.52 and PetroChina gained 0.6 percent to HK$8.87.

Mainland grocery giant China Resources Enterprises rose 7.8 percent to HK$25.70 after announcing it is holding talks with British supermarket chain Tesco to form a joint venture.

Chinese shares ended up 0.36 percent. The benchmark Shanghai Composite Index rose 7.34 points to 2,052.24 on turnover of 83.0 billion yuan ($13.6 billion).

Resources shares led gains. Baotou Steel Rare-Earth surged by its 10 percent daily limit to 28.16 yuan, Xiamen Tungsten gained 6.58 percent to 30.92 yuan and Jiangxi Copper rose 3.94 percent to 17.16 yuan.

Yanzhou Coal Mining climbed 2.91 percent to 10.27 yuan while Yangquan Coal Industry rose 2.62 percent to 9.02 yuan.

-- Dow Jones Newswires contributed to this report --

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http://www.globalpost.com/dispatch/news/afp/130809/hong-kong-shares-07-close-0