Hong Kong - Hong Kong shares rocketed up by nearly 4 per cent in early trading Monday as the US mortgage bailout generated global optimism that the credit crunch might be over.

Shortly after midday, the Hang Seng Index stood at 20,701.13, up 767.85 points, or 3.85 per cent. Turnover was 36 billion Hong Kong dollars (4.6 billion US dollars).

The surge in prices followed a black week on the Hong Kong stock market, which saw shares tumble below 20,000 for the first time in 17 months.

Analysts said the rally was generated almost entirely by Washington's announcement Sunday that it was taking over troubled Fannie Mae and Freddie Mac, which manage nearly half the 12-trillion-dollar US mortgage market. (dpa)