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Hong Kong shares climbed to a five-month high on Monday — the last full trading day of the year — as investors remained optimistic about the outcome of the Sino-US trade talks, as well as monetary easing on the Chinese mainland.

The benchmark Hang Seng Index surged 0.33 percent, or 93.27 points, to end the day at 28,319.39 after having dipped to as low as 28,165 in morning trading.

Market turnover reached HK$76.76 billion ($9.86 billion) on the Main Board. The Hang Seng China Enterprises (H-share) Index closed up 30.76 points, or 0.27 percent, at 11,225.31.

Investors were heartened by the progress in the trade negotiations between the world"s two largest economies as they await the signing of the first phase of a trade deal agreed on by both sides earlier this month.

The local stock market also received a boost from the People"s Bank of China"s directive to lenders to use a new market-based mechanism to set interest rates.

According to the PBOC, the central bank will use the loan prime rate (LPR) to replace the old loan-pricing system as a new benchmark for pricing existing floating-rate loans.

Analysts believe the move could help lower borrowing costs for businesses and individuals, and is also seen as an effort to loosen monetary policies and underpin economic growth.

The central bank"s directive lifted mainland property shares listed in Hong Kong. China Resources Land jumped 1.05 percent to HK$38.45 — its highest level in 52 weeks. Country Garden Holdings Company hiked 0.96 percent to HK$12.56 and Sunac China Holdings was up 0.32 percent at HK$46.75.

The PBOC is also expected to reduce the amount of cash banks must hold and ease monetary further.

Meanwhile, two Chinese mainland companies made their IPO debut in Hong Kong on Monday. Powerlong Commercial Management Holdings, a commercial operational service provider under Powerlong Holdings, saw its share price advance 5.8 percent to HK$10.06. But, Bank of Guizhou slipped 7.2 percent to HK$2.3. The lender had raised HK$5.46 billion in gross proceeds from an initial public offering.

The Hong Kong stock market will close at midday today (Tuesday), New Year"s Eve, and will be shut on Wednesday, New Year"s Day.

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