China's key stock indexclosed up 4.76 percent on Friday, its third-biggest daily gainthis year, as the market played catch-up with a strong globalrally during the country's eight-day National Day holiday.

In Hong Kong, shares ended flat as some investors took profitafter four days of gains. The Shanghai Composite Index .SSEC closed at 2,911.715points, with all 893 traded stocks posting gains.

PetroChina (601857.SS), the index's most heavily weightedstock, ended up 3.7 percent at 13.17 yuan after large-cap sharesunderperformed the market in the run-up to the holiday break.

Top lender Industrial and Commercial Bank of China(601398.SS) rose 3.56 percent to 4.94 yuan, while the biggesthousing mortgage lender, Construction Bank of China (601939.SS),added 3.94 percent to 5.80 yuan. Overall trading activity staged a measured recovery fromsluggish volumes before the holiday.

Turnover of Shanghai A shares rose to 93 billion yuan ($14billion) on Friday from 68 billion yuan on Sept. 30, the last dayof trading before the holiday.

The Shanghai market is expected to be supported by freshsigns of economic recovery in China when the government announceskey September economic data next week, but remains under pressurefrom large supplies of new shares, among other negative factors.

While strong September figures are expected to give themarket a shot in the arm in the medium term, the index'sshort-term upside will still be limited because of factorsincluding cautious investor sentiment, said Cao Xuefeng, seniorstock analyst at Western Securities in Chengdu.

A clear sign ofcaution today was that turnover wasn't even able to breach themoderately active level of 100 billion yuan.

Friday's rally allowed the benchmark index to recapture its125-day, or half-year, moving average, now at 2,870 points, butanalysts said investor sentiment still needed time to recover.

The index lost 6 percent in the third quarter, marking itsworst quarterly performance this year, as sentiment was depressedby supplies of new shares including initial public offerings onChina's planned Nasdaq-style second board, ChiNext.

State media said on Friday that a third batch of companies tobe listed on ChiNext received regulatory approval and aimed toraise a combined total of about 2.15 billion yuan. The offeringswill be priced on Oct. 13 and take subscriptions on Oct. 15.

China's markets were closed from Oct. 1 to Oct. 8. HONG KONG'S RISE SLOWS Shares in Hong Kong were flat as investors took profit onstocks that posted sharp gains in recent sessions, including HSBC(0005.HK).

The market has already rebounded more than 1,000 points in avery short period of time, so there is bound to be someprofit-taking pressure, said Ben Kwong, chief operating officerat KGI Asia.

Debutant Wynn Macau (1128.HK), the Asia unit of U.S. casinogiant Wynn Resorts (WYNN.O), rose 6.15 percent, signalling thatappetite for gambling stocks remained strong.

Sharp gains for market debuts in Hong Kong on Thursday,including infant formula maker Ausnutria Dairy Corp (1717.HK),also helped Wynn Macau's rise.

Ausnutria closed up 3.53 percenton Friday after advancing 27.5 percent in the previous session. The benchmark Hang Seng Index .HSI inched up 6.54 points to21,499.44, the highest since Sept. 23.

For the week, the indexwas up 5.52 percent. Turnover was HK$62.2 billion ($8 billion), up from 59.9billion on Thursday. HSBC (0005.HK) fell 0.34 percent, snapping a three-day 3.9percent rise. Cathay Pacific (0293.HK) advanced for a fourth day, rising3.48 percent.

Hong Kong's top airline said on Monday that itposted its best weekly passenger load factor for 2009 last week.

The China Enterprises Index of top locally listed mainlandChinese companies was up 0.32 percent at 12,496.06, led by a 4.2percent gain in China Shipping Development (1138.HK). China's gold miners slipped as gold eased from record highs.Realgold Mining (0246.HK) fell 4.4 percent, while Lingbao Gold(3330.HK) dropped 2.88 percent.

China Investment HANG SENG INDEX HSBC