Oct. 30 (Bloomberg) -- Hong Kong's stocks surged, driving the Hang Seng Index to its steepest three-day gain in 35 years, after China cut interest rates for the third time in two months and the city followed the U.S. rate reduction.

Aluminum Corp. of China Ltd., the country's largest producer of the metal, soared 22 percent. Cnooc Ltd., China's biggest offshore oil producer, advanced 22 percent after crude oil prices gained. Sino Land Co., a Hong Kong-based developer, climbed 25 percent.

``We've begun buying into the market gradually, starting this month,'' said Nancy Lee, a Hong Kong-based portfolio manager at Taifook Asset Management Ltd., which oversees $500 million. ``We lowered our cash level. Some shares are massively oversold. Rate cuts are also having a big impact. Liquidity is not as tight now.''

The Hang Seng Index jumped 1,627.78, or 13 percent, to close at 14,329.85, extending its winning streak to 30 percent, the gauge's biggest three-day advance since the period ended April 13, 1973. The Hang Seng China Enterprises Index, which tracks so-called H shares of Chinese companies, soared 17 percent to 6,764.04, its sharpest advance since Feb. 2, 1998.

Aluminum Corp., known as Chalco, surged 22 percent to HK$2.89. Ping An Insurance (Group) Co., the nation's second- largest insurer, gained 19 percent to HK$31.10. China Mobile Ltd., the world's largest mobile-phone operator by users, added 13 percent to HK$68.10, making it the second-biggest contributor to the Hang Seng Index's gains.

The People's Bank of China yesterday reduced its benchmark one-year lending rate to 6.66 percent from 6.93 percent. The bank also said the deposit rate will drop to 3.60 percent from 3.87 percent.

Sun Hung Kai

Cnooc jumped 22 percent to HK$6.13. PetroChina Co. surged 20 percent to HK$5.90. Asia's biggest oil producer said yesterday third-quarter profit rose 30 percent to 39.9 billion yuan ($5.8 billion) after crude oil prices surged to a record and output climbed. That's higher than the median estimate of 30.2 billion yuan in a Bloomberg survey of analysts.

Crude oil futures added 7.6 percent to $67.50 a barrel in New York yesterday. The contract was recently at $68.95 in after-hours trading.

Sino Land surged 25 percent to HK$7.50. Sun Hung Kai Properties Ltd., the city's second-biggest developer by value, climbed 8.9 percent to HK$67. Cheung Kong (Holdings) Ltd., the largest, added 6.1 percent to HK$75.30.

The Hong Kong Monetary Authority lowered its base rate to 1.5 percent from 2 percent, after yesterday's move by the U.S. Federal Reserve. The rate is at a record low after today's reduction, said HKMA spokesman Thomas Chan.

Forty stocks on the 42-member Hang Seng Index advanced. October futures, which expired after the market closed, climbed 8 percent to 13,719. The more active November futures jumped 12 percent to 14,150.

The following stocks rose or fell. Stock symbols are in brackets after company names.

BOC Hong Kong (Holdings) Ltd. (2388 HK) slipped 12 cents, or 1.3 percent, to HK$9.10. The city's largest publicly traded bank by assets said yesterday it booked an additional HK$3.2 billion ($413 million) in impairment losses on its U.S. credit investments in the third quarter.

China Cosco Holdings Co. (1919 HK) surged HK$1.20, or 41 percent, to HK$4.10, its biggest jump on record. Asia's largest shipping company by value boosted third-quarter profit 18 percent to 5.56 billion yuan after buying more than 400 vessels from its parent to carry iron-ore and coal.

China Oilfield Services Ltd. (2883 HK) advanced 87 cents, or 26 percent, to HK$4.28. The unit of the nation's largest offshore oil producer said yesterday profit more than doubled in the third quarter to 1.21 billion yuan as record crude prices spurred companies to increase spending on exploration.

Techtronic Industries Co. (669 HK), the manufacturer of Hoover vacuum cleaners and Ryobi power tools, jumped HK$1.23, or 98 percent, to HK$2.48, the biggest increase since April 1991. The stock's 14-day relative strength index, which shows how rapidly prices have advanced or dropped, fell to 10.9 yesterday, below the 30 threshold some investors use as a signal to buy.

To contact the reporter on this story: Hanny Wan in Hong Kong at hwan3@bloomberg.net

Last Updated: October 30, 2008 05:11 EDT