"It's a technical rebound. China Construction Bank is up because it will be included in the benchmark MSCI tomorrow, so funds are buying," said Louis Wong, research director at Phillip Securities.
China Construction Bank, which has floundered since its mega-US $8 billion listing in late October, rose 4.26 percent to HK$2.45 and was the most actively traded Hong Kong stock.
The blue chip Hang Seng Index closed 194.35 points higher at 14,597.55. Volume was above recent averages with HK$25 billion ($3.2 billion) worth of shares exchanged.
Denway Motors Ltd, which makes cars through a Chinese joint venture with Japan's Honda Motor Co, jumped 5.38 percent to HK$2.45, after dipping nearly 17 percent in the past month.
Index heavyweight China Mobile (Hong Kong) Ltd was also a top performer, up 3.2 percent to HK$35.60. Some analysts said China plays were benefiting from talk of a further yuan appreciation ahead of a visit to China by US George Bush to China later this month.
Property shares recovered from recent losses on worries that interest rate rises would further dampen consumer demand for new homes after a robust start to the year.
The city's top developer Sun Hung Kai Properties Ltd rose 1.04 percent to HK$73.15. The Hang Seng properties sub index rose 1.24 percent after plumbing its lowest levels since June.
Dealers said rate hike worries had largely been priced into the market, but expectations that prime rates will move to 5-year highs early next year would cap large gains.
Ports-to-telecom conglomerate Hutchison Whampoa Ltd rose 2.22 percent to HK$73.65 after confirming it had the green light to list its Italian 3G mobile phone unit, though it has not given a timeframe for the deal.
Sister property firm Cheung Kong (Holdings) Ltd rose 1.4 percent to HK$78.70.
Global casual wear retailer Esprit Holdings Ltd extended recent losses, down 3.9 percent to HK$52.35, on worries about a slipping euro currency, and on a recent rating downgrade.
Shares in the casino group A-Max Holdings Ltd dipped 19.6 percent to HK$0.45 after the firm said it would issue HK$602 million (US $77 million) worth of new shares to help pay up to HK$2 billion to increase its holdings in one of Macau's largest casinos.
Hong Kong Clearing and Exchanges Ltd (HKEx) fell 1.9 percent to HK$26 after posting a slightly stronger than expected 57 percent rise in third-quarter earnings from the year ago period.