HK shares jump 2.5 pct to take weekly gain to 9.7 pct

* Shares rise for 4th day after China rate cuts

* Brokers expect strong Dec; see HSI at 16,000-17,000 pts

* Commodity counters rise on steady demand hopes

(Updates to close)

By Parvathy Ullatil

HONG KONG, Nov 28 (Reuters) - Hong Kong shares rose 2.5 percent on Friday, as aggressive rate reductions in China and cheap valuations of local blue chips pushed the main index into its fourth straight day of gains.

The main index soared 9.7 percent this week, boosted by the U.S. government's latest rescue plan aimed at boosting consumer lending, and China's unexpected interest rate bonanza. The index was little changed for the month.

"After the U.S. announced another bailout plan and China announced big rate cuts, there is a feeling among investors that the credit crunch may be over and the worst of the current global financial turmoil may be behind us," said Alex Tang, research director with Core-Pacific Yamaichi International.

"There is also a feeling that December may be a month of gains, with the Hang Seng Index pushing back up to 16,000-17,000 points. Hong Kong shares are really underweight now."

A 50 percent plunge on the main index has left valuations of blue-chip counters languishing at 10-year lows, their cheapest since the Asian financial crisis.

The benchmark Hang Seng Index .HSI ended the session up 336.18 points at 13,888.24.

Mainboard turnover shrunk to HK$42.4 billion from HK$50.2 billion on Thursday.

Firmer global oil prices ahead of an OPEC meeting and expectations of steady demand from the mainland following this week's aggressive interest rate cuts supported gains in commodity counters.

Offshore oil specialist CNOOC (0883.HK: Quote, Profile, Research, Stock Buzz) jumped 5.8 percent, while top miner China Shenhua (1088.HK: Quote, Profile, Research, Stock Buzz) rallied 7.3 percent.

The China Enterprises Index of top locally listed mainland Chinese firms .HSCE rose 1.7 percent to 7,238.01, led by a 4.3 percent gain in No.2 lender Bank of China (3988.HK: Quote, Profile, Research, Stock Buzz) after a 1 percentage point reduction in the reserve requirement at large Chinese banks.

China's higher-than-expected 1.08 percent interest rate cut sent Guangzhou R&F Properties, a property developer with a relatively high gearing ratio, soaring 15.5 percent, to notch up a whopping 41 percent gain this week. The stock is still down 89 percent from its peak, scaled in November 2007, amid falling property prices in southern China.

Talk of more rate cuts and stimulus measures also kept interest in the battered sector alive.

"There is increasing market speculation that China may introduce an income tax rebate for home purchases as part of the next round of policy stimulus," said Goldman Sachs' Yi Wang.

HK PROPERTIES EXTEND GAINS

Shares of Hong Kong property developers, which fell to five-year lows last week, extended gains on Friday, following positive recommendation changes from major brokerage houses this week.

Wharf Holdings (0004.HK: Quote, Profile, Research, Stock Buzz) added 15 percent, taking its total gains since Wednesday, when Goldman Sachs added the stock to its conviction buy list, to 25 percent.

Another Hong Kong-based conglomerate with interests in the property sector, Swire Pacific (0019.HK: Quote, Profile, Research, Stock Buzz), surged 10.2.

Sun Hung Kai Properties (0016.HK: Quote, Profile, Research, Stock Buzz) leapt 6.7 percent. Hong Kong's biggest developer sold all of its first batch of 20 luxury units at Shatin, in Hong Kong's new territories, within two hours last night, the South China Morning Post said, citing market sources.

Rival Cheung Kong (0001.HK: Quote, Profile, Research, Stock Buzz) gained 4.1 percent. The company said on Thursday its Hong Kong flat sales so far this year stood at a record $3.6 billion and limited supply of new flats should keep recent price falls in check. [ID:nHKG166713]

While the laggards played catch-up, this week's big gainers saw some profit taking, with China Construction Bank (0939.HK: Quote, Profile, Research, Stock Buzz) closing 2.6 percent lower and top bank ICBC <1398.hk>