China hopes propel HK shares to 2-mnth high

* HSI closes at 2-month high; up 15 pct in a week

* China shares soar on government support hopes

* Air China surges on likely cancellation of plane orders

(Updates to close)

By Parvathy Ullatil

HONG KONG, Dec 10 (Reuters) - Hong Kong shares soared 5.6 percent on Wednesday to finish at a nearly two-month high as investors, pinning their hopes on massive stimulus measures from Beijing, snapped up China stocks.

Local shares have surged nearly 15 percent in a week on talk that China will announce a slew of measures to boost private consumption and prop up the stock markets as a three-day meeting of top Chinese leaders concludes Wednesday.

Hong Kong shares in China's flag carrier, Air China (0753.HK: Quote, Profile, Research, Stock Buzz), shot up more than 22 percent after the aviation regulator encouraged airlines to cancel or postpone plane deliveries due in 2009 amid slackening demand for air travel.

The benchmark Hang Seng Index .HSI ended 824.52 points higher at 15,577.74, its highest close since Oct.15.

"People are basically buying into the China stimulus story. And talk about the 'through train' scheme also keeps popping up every now and then," said Howard Gorges, vice chairman at South China Securities.

The 'through train' scheme, which is a direct investment scheme for Chinese individual investors to buy Hong Kong equities, was first proposed by mainland authorities in August 2007 but was stalled amid concerns over Hong Kong's volatile markets. But the territory's financial secretary John Tsang said earlier this week the scheme was still on track.

Mainboard turnover rose to HK$61.9 billion from HK$56.9 billion on Tuesday.

"Essentially there has been a change in sentiment, confidence has improved and volumes have picked up quite decently. Long term fund seem to have done most of their selling in the last two months and are slowly getting back to buying," said Gorges.

CHINA STOCKS LEAD

The China Enterprises Index of top locally listed mainland Chinese firms .HSCE rose 6.3 percent to 8,507.49.

Chinese banking counters surged, with top lender ICBC (1398.HK: Quote, Profile, Research, Stock Buzz) jumping 5.9 percent while No. 3 lender China Construction Bank (0939.HK: Quote, Profile, Research, Stock Buzz) added 5.6 percent.

Commodity stocks also defied the overnight drop in crude oil prices to extend Tuesday's rally on hopes that bold stimulus measures from governments across the world would help turn around the global economic outlook and boost demand for raw materials.

Asia's largest oil and gas producer, PetroChina (0857.HK: Quote, Profile, Research, Stock Buzz), rallied 6 percent, while offshore oil specialist CNOOC (0883.HK: Quote, Profile, Research, Stock Buzz) added 12.7 percent.

Coal miner China Coal Energy (1898.HK: Quote, Profile, Research, Stock Buzz) gained 14.6 percent while gold miner Zijin Mining (2899.HK: Quote, Profile, Research, Stock Buzz) jumped 17.7 percent.

Chinese carmakers joined regional rivals in cheering a tentative agreement on the rescue plan for the battered U.S. auto industry.

Dongfeng Group (0489.HK: Quote, Profile, Research, Stock Buzz) vaulted 19.9 percent while Denway Motors (0203.HK: Quote, Profile, Research, Stock Buzz) bulked up 13.4 percent. Brilliance China (1114.HK: Quote, Profile, Research, Stock Buzz) jumped up 14.3 percent.

(Reporting by Parvathy Ullatil; Editing by Jonathan Hopfner)