* HSI records best weekly gain in 6 weeks
* HSBC extends gains after recent plunge
* Turnover rises as uncertainty over closing auction removed
(Updates to close)
HONG KONG - Hong Kong shares jumped 4.4 percent in its fourth day of gains on Friday, leading the main index to its best weekly rise in a month and a half, with China stocks outperforming as investors continued to cheer hints of economic recovery in the mainland.
Turnover, which fell to its lowest this year on Thursday, returned to normal after the Hong Kong Exchanges & Clearing said it would indefinitely suspend its end-of-session settlement auction starting March 23.
The announcement followed protests over alleged market manipulation after shares in HSBC doubled its daily loss to plunge 24 percent in the final few seconds of Monday's closing auction.
The benchmark Hang Seng Index .HSI ended 524.27 points higher at 12.525.80, rising to a two week high. The index rose 5.1 percent on the week despite a HSBC-led steep drop on Monday.
Even though exports fell sharply in February, a slew of positive data including money supply and lending growth seem to suggest that economic activity has really picked up in China, said Alex Tang, head of Research with Core Pacific-Yamaichi International.
Investors all got over the lack of more concrete announcements on further stimulus spending from China as its annual parliament session wound to close on Friday.
We don't just listen to what they say, we are more interested in the results, and this week's data delivers that, said Tang.
Market watchers are betting that the main index may climb to 14,000 points in the near term if the U.S. market can extend its recent rally.
Market turnover rose to HK$43.9 billion from an anaemic HK$28.5 billion on Thursday.
HSBC extended the previous session's gains to rise 5.7 percent to HK$38.25 after its shares began trading without rights, recovering from a five-session carnage that began when it announced its massive cash call last week.
Among other gainers, Manulife Financial Corp built on its two-day, 18-percent surge, with a rally in global equity markets easing concern over the key regulatory capital ratio at Canada's top insurer. The stock jumped 16.7 percent to HK$77.
Manulife shares rose 13 percent in Toronto overnight after the main index there hit a three-week high, riding positive news from the U.S. banking sector.
CHINA STOCKS RALLY
Chinese property stocks extended gains on expectations China's fall into deflation in February would prompt the central bank to announce an interest rate cut soon.
China Overseas Land rose 6 percent to HK$12.30 while Guangzhou R&F Properties rallied 6.8 percent.
The China Enterprises Index .HSCE of top mainland firms rose 4.6 percent to 7,282.52, defying a 0.2 percent drop on the Shanghai Composite Index .SSEC after reassurance of further stimulus measures from Beijing.
Bank stocks also gained, recovering from Thursday's pullback when investors locked in gains after data showed new lending in February topped 1 trillion yuan as expected.
Shares in top bank ICBC up 5 percent to HK$3.35, while No.3 lender China Construction Bank climbed 4.9 percent to HK$4.08. Bank of Communications piled on 6.4 percent.
Ping An Insurance jumped 8 percent to HK$44 after Merrill Lynch raised its target price on the stock to HK$47.97 from HK$45.25 on expectations China's second-largest insurer would continue to outperform the industry in both profit and premium growth.
UBS upgraded the stock to buy from neutral on Thursday after Ping An reported 31 percent growth in premiums for February. Other insurers also rallied, with China Life up 4.9 percent and non-life insurer PICC P&C 7.1 percent higher.
(Reporting by Parvathy Ullatil; Editing by Ken Wills) (firstname.lastname@example.org; +852 2843-6415))