Hong Kong stocks rose, with the benchmark index rising to its highest level since May, as the Federal Reserve said it will buy mortgage-backed securities to boost growth in the world's biggest economy.

The Hang Seng Index climbed 2.9 percent to 20629.78, its highest close since May 4. All but three shares rose on the 49-company gauge, which advanced 4.2 percent for the week. Volume on the measure was 83 percent above its 30-day average on Friday, according to data compiled by Bloomberg.

"The Fed confirmed the easing speculation the market had," said Benjamin Tam, who helps manage about $1.5 billion at IG Investment Ltd in Hong Kong. Recent easing measures by central banks to boost economic growth are a short-term relief, Tam said. "Confidence is still fragile at this point. It doesn't mean they've solved the problem."

The Hang Seng China Enterprises Index of mainland companies, also known as the H-share index, increased 3.7 percent to 9829.43. Materials and energy companies led the advance, with all industry groups rising on the Hang Seng Composite Index, the city's broadest share index.

The central bank will continue its purchases of mortgage-backed securities and undertake other asset purchases if the outlook for the labor market doesn't improve substantially, the Federal Open Market Committee said on Thursday. It also said it would probably hold the federal funds rate near zero "at least through mid-2015."

Futures on the Hang Seng Index gained 3 percent to 20642. The HSI Volatility Index slid 1.2 percent to 18.52, indicating traders expect a swing of 5.3 percent for the equity benchmark in the next 30 days.

(HK Edition 09/15/2012 page2)