Instead of jacking up lending rates, Tsang used the reserves both to buy off hedge funds dumping Hong Kong dollars and to purchase Hang Seng stocks, lifting the index.

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Sandwiched between the problems of the West and China, Hong Kong's Hang Seng Index, made up largely of Chinese stocks known as H-shares, was also battered, finishing the year down 20%.

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In Hong Kong however, stocks were still recording fresh declines, with the Hang Seng Index down 0.3%.

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Asian stocks also closed up, with Hong Kong's Hang Seng index surging 2% to 19, 508.18 and Japan's Nikkei closing up 1.1% at 8, 603.70.

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Chinese stocks were higher ahead of the data, with Hong Kong's Hang Seng Index up 0.9% and the Shanghai Composite Index 2.1% higher.

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Chinese stocks were higher ahead of the data, with Hong Kong's Hang Seng Index up 0.5% and the Shanghai Composite Index 1.1% higher.

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One of Thursday's worst-performing stock markets in the region was Hong Kong's, where the Hang Seng Index dropped 2% to 19025.11, dragged down by bank, telecom and consumption stocks.

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Stocks were also tracking a negative trading session in Asia, where Hong Kong's Hang Seng index closed down 2.2% and the Nikkei 225 was off by 0.8%.

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