Hang Seng Index, the benchmark stock index in Hong Kong, has risen to its highest level in seven months close to the high of this year.

Investors showed confidence after consumer-inflation data was mostly in line with expectations. Indications that the slowdown in Chinese economy might be giving way to a strong recovery also helped boost investor confidence in the Hong Kong market.

Chinese shares in the Hong Kong market rose after reports showed that the world's second-largest economy might begin recovery soon. The Chinese economy grew 7.4 percent in the third quarter, which is seventh-straight quarter of slowing growth. The September industrial output and retail sales data from the country were better than expected.

The Hang Seng increased 0.6 percent to 21,546.1 and many believe that it would set a record for a new high for 2012. The index was at its highest at 21,760.3 on February 20. The China Enterprises Index of the top Chinese listings in Hong Kong rose 1.3 percent.

Analysts say that investors are new ready to take more risks and funds are looking to boost performance in the year. This has helped bring inflows into the capital markets allowing index to grow.