Hong Kong shares surge 3.09%

Hong Kong shares have surged 3.09 per cent after the European Central Bank (ECB) unveiled plans to buy sovereign bonds of under-pressure nations in a bid to tackle the eurozone debt crisis.

The benchmark Hang Seng Index on Friday rose 592.86 points to 19,802.16 on turnover of HK$93.24 billion ($A11.75 billion).

Bank president Mario Draghi said on Thursday the ECB would buy unlimited amounts of debt from troubled nations such as Spain and Italy in order to lower their cost of borrowing and help them get back on their feet - a scheme named Outright Monetary Transactions (OMTs).

The OMTs "will enable us to address severe distortions in government bond markets which originate from, in particular, unfounded fears on the part of investors of the reversibility of the euro", Draghi said.

"We will do whatever it takes" to keep the eurozone together, he added.

Dariusz Kowalczyk, senior economist and strategist at Credit Agricole, said the announcement "exceeded market expectations, which hasn't happened for a long time".

He added: "It draws a line, for a while at least, under the issue of peripheral European debt."

Insurer AIA rose 6.8 per cent to $HK28.10 after US parent AIG sold 591.9 million AIA shares for a rarely seen premium for a block sale of shares in Asia. It sold them at $HK26.50 each, up 0.8 per cent from AIA's closing share price on Thursday, according to an announcement from AIA on Friday.

China Coal Energy surged 8.2 per cent to $HK6.72 thanks to bargain hunting after a heavy fall recently caused by worries about Chinese economic growth.

Hong Kong property stocks shrugged off a plan announced by Hong Kong chief executive Leung Chun-ying on Thursday to set aside land to build homes for permanent residents, a step towards limiting the influx of Chinese home-buyers that has pushed up the city's property prices.

Henderson Land gained 4.2 per cent to $HK49.75 and New World Development rose 3.7 per cent to $HK9.84.

Chinese shares surged 3.70 per cent, with dealers hoping the country's leaders would soon embark on a new round of stimulus to boost the slowing economy.

The benchmark Shanghai Composite Index gained 75.84 points to 2,127.76 on turnover of 111.1 billion yuan ($A17.09 billion). The index rose 3.92 per cent for the week.

Confidence was stoked after China's top economic planner announced said this week that it had approved several infrastructure projects.

"It's very likely the government will launch more pro-growth measures in September and October," Zheshang Securities analyst Wang Weijun told Dow Jones Newswires.

Eyes are now on the release of key economic data for August, including inflation and retail sales, which will be released on Sunday.

Cement producers and construction companies rose. Fujian Cement surged by its daily 10 per cent trading limit to 6.44 yuan and another cement maker, Anhui Conch, soared 10 per cent to 15.07 yuan.

China Communications Construction jumped 7.45 per cent to 4.47 yuan while Tengda Construction gained 4.93 per cent to 2.98 yuan.

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