Hong Kong shares end at 19-month high, China plays lead

* HSI +2.9 pct, H-shares +4 pct, China shut until Friday

* HSI breaks above 22,800 resistance in strong turnover

* Shares linked to China financial sector reform strong

* Sands China jumps after record monthly Macau gambling

revenue

HONG KONG, Jan 2 (Reuters) - Hong Kong shares kicked off the

new year by closing at a 19-month high on Wednesday, as

investors cheered the passage of a bill in the United States

Congress that averted a fiscal crisis and eased worry of a

recession in the world's largest economy.

Investors chased gains in China growth-sensitive counters

that were laggards in 2012 and thematic plays such as non-bank

financials and property that are expected to outperform this

year. Bourse turnover was at its highest since Dec. 18.

The Hang Seng Index climbed 2.9 percent to 23,312

points, its highest since June 2011 and decisively breaking

above chart resistance at around 22,800 that has stymied gains

for much of the previous two weeks.

The China Enterprises Index of the top Chinese

listings jumped 4 percent in its best daily gain in a year,

closing at its highest since August 2011.

Gains on Wednesday accelerated after the United States

averted economic calamity when lawmakers approved a deal to

prevent huge tax hikes and spending cuts that would have pushed

the country into recession.

"In the short term, this may trigger some reversal of flows

back to the U.S., but the effects of that will probably be

offset by flows from Japan as the yen continues to weaken," said

Hong Hao, chief equity strategist at Bank of Communications

International Securities.

"There's also an element of catch up today as people begin

to return from their holidays and realise they have missed out

on the December rally in the China market," Hong added.

An 18 percent gain in December, its best monthly showing

since July 2009, helped the CSI300 of the top Shanghai and

Shenzhen listings to its first annual gain in three. Mainland

markets were shut on Wednesday and will resume trade on Friday.

On Wednesday, Chinese steel producer Citic Pacific

surged 11.4 percent to its highest since April 2012. It had

finished 2012 down 17.4 percent and underperformed the Hang Seng

Index's 23 percent jump.

Chinese sportswear brands Li Ning and Anta Sports

, which fell 18.3 and 25.7 percent in 2012

respectively, each soared 11.9 and 8 percent on Wednesday.

The annual declines in 2012 were Citic Pacific's and Li

Ning's third-straight annual loss, and the second year of loss

for Anta Sports.

Aluminum Corporation of China (Chalco) jumped 6.2

percent to return to levels not seen since May 2012. It had

finished 2012 up 5 percent, failing to retain much of its gains

from early last year.

Metallurgical Corp of China Ltd gained 6.6 percent

after the company said it would transfer its 51.06 percent

equity interest in loss-making Huludao Nonferrous Group to its

controlling shareholder.

CHINA THEMATIC PLAYS STRONG

Chinese financials were strong after China's official

manufacturing purchasing managers' index held steady in December

at 50.6, matching November's seven-month high, that pointed to

steadying growth recovery in the world's second-largest economy.

But non-banking financial counters outperformed, with China

Life Insurance rising 6.7 percent, extending strong

2012 gains on hopes that financial sector reforms in the

mainland will benefit insurers and brokerages.

New China Life Insurance spiked 12.6 percent in

its best daily gain since it made its Hong Kong listing debut in

December 2011.

The mainland's securities regulator had said over the

weekend that it plans to allow eligible securities houses and

insurers' asset management units to develop and manage mutual

funds in a bid to reinvigorate an industry struggling to produce

returns for investors.

This follows an announcement last week allowing brokerages

to sell subordinated debt and the Chinese central bank pledging

to quicken the pace of reform in the financial sector that sent

shares of Chinese brokerages soaring last Friday.

Citic Securities, China's largest listed

brokerage, jumped 6.1 percent to close at a record high after

posting a 53 percent gain in 2012.

Financial sector reforms in China are expected to stay a

dominant theme in 2013, analysts say, as would Chinese

urbanisation-related counters such as property developers, which

were also stronger on Wednesday.

But in a sign that such hopes may not extend sector-wide,

Country Gardens ended up 2 percent, paring gains after

its nine-month net profit showed the property developer posting

a 34.4 percent rise in profit from a year earlier.

The Macau gaming sector extended gains after data showed

monthly Macau gaming revenue hitting a record high in December.

Sands China jumped 5.3 percent.

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