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HONG KONG (AP) -- Hong Kong shares bounced back strongly Friday from a sharp two-day drop as traders bought bourse operator Hong Kong Exchanges and other stocks judged to have fallen to attractive levels. The Hang Seng Index rose 857.54 points, or 3.2 percent, to 27,831.52. The previous two days, the index had tumbled 4.3 percent. Traders said they expect the index to continue to rise next week, but that it will likely meet profit-taking again around 28,000 points. "The upward momentum remains intact due to abundant liquidity," said Francis Lun, general manager of Fulbright Securities. "The index could test 28,000 next week, mainly driven by China-related stocks." ICEA said in a research note it expects volatility to remain, but doesn't see a repeat of August's tumble. On Aug. 17, the benchmark index fell as much as 6 percent at one point before recovering most of its losses, amid concerns about a global credit crunch sparked by U.S. subprime mortgage problems. Since then, the index has risen 37 percent. Hong Kong Exchanges was the biggest blue chip gainer Friday, soaring 6.9 percent to HK$244.20, after Goldman Sachs raised its target price to HK$280 from HK$213 on the recent market rally and increased trading volume. HSBC, the second-largest blue chip by market capitalization behind China Mobile, rose 1.2 percent to HK$150.8. "HSBC's gain was mainly propelled by investors chasing laggards," said Castor Pang, a strategist at Sun Hung Kai Research. The bank has risen just 5.8 percent in the year to date, compared with the Hang Seng Index's nearly 40 percent gain. China Mobile, the world's biggest mobile phone operator by subscribers, jumped 2.6 percent to HK$129.90 after it fell more than 6 percent in the previous two sessions. Major oil producers gained on high crude oil prices. PetroChina advanced 8.5 percent to HK$14.60, offshore oil producer CNOOC rose 6.3 percent to HK$12.50 and Sinopec jumped 6.4 percent to HK$9.77.
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