Hong Kong's key stock index closed above 10,700 points for the first time in 13 months yesterday, with strong gains for property and export stocks as investors bet on an economic recovery.

Sun Hung Kai Properties Ltd, Henderson Land Development Ltd and Wharf Holdings Ltd rose on hopes that frequent mainland visitors will buy flats here after Beijing eased visa restrictions.

The benchmark Hang Seng Index ended up 1.1 per cent, or 117.1 points, at 10,760.73, its highest close since early July last year. The index was up 3 per cent on the week.

"We are still bullish. I would keep adding to my portfolio up to 11,000 points, then there might be some profit-taking," said Edmond Lee, strategist at Sun Hung Kai Research.

Turnover stood at HK$14.95 billion, the second highest this year, with lots of buying from overseas funds who see Asia benefiting from the US economic recovery, traders said.

Earlier this week, a real estate agency reported that one mainland traveller paid more than HK$2 million in cash for five apartments while on a visit to Hong Kong.

The property sub-index rose 3.75 per cent, with Sun Hung Kai up 5.14 per cent to HK$56.25, Henderson up 4.04 per cent to HK$29.60 and Wharf Holdings Ltd gaining 3.18 per cent to HK$17.85.

The index has risen 15.4 per cent this year on hopes for an economic recovery both overseas and at home, where a new trade deal between Hong Kong and the mainland has raised high hopes for the retail, tourism and property sectors.

Hutchison Whampoa Ltd and sister firm property conglomerate Cheung Kong (Holdings) Ltd both performed well after unveiling first half results.

Hutchison climbed 2.27 per cent to HK$56.25 and hit a year high after reporting on Thursday a 2 per cent rise in first-half net profit.

"Apart from 3G, its core ops are quite strong and the company said it would spin off some businesses possibly boosting its bottom line," said Herbert Lau, research director at Celestial Asia Securities.

Property conglomerate Cheung Kong Holdings Ltd, which owns about 50 per cent of Hutchison, rose 3.98 per cent to HK$58.75, helped by the improved sentiment toward property stocks.

Consumer goods exporter Li & Fung Ltd rose 6.3 per cent to HK$13.50 and micro-motor maker Johnson Electric Holdings Ltd pushed 2.71 per cent higher to HK$11.35 after fresh economic data provided more evidence the US economy may finally be recovering. Both firms derive substantial earnings from the United States.

Mobile network operator China Unicom Ltd forged 6.14 per cent higher to HK$6.05. It has lagged the market this year.

Sportswear maker Eagle Nice (International) Holdings Ltd made a strong debut, ending up 28 per cent from its issue price of HK$1.

But investors took profits on banks, with Bank of East Asia falling 3.26 per cent to HK$17.80 and Hang Seng Bank slipping 0.46 per cent to HK$86.

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