Francis Lun, general manager of Fulbright Securities Ltd., said he thinks the market correction in recent weeks appears to be nearing an end. "The market performance will be determined by corporate earnings results," Lun said.

One of the most anticipated earnings reports this week will come Wednesday from China Mobile. The company's shares climbed 3.4 percent on expectations of a robust net profit for last year. It was the most heavily traded stock on the market, with HK$2.65 billion ($339.2 million) worth of shares changing hands.

"Many investors already factored in the rate hike last week before the official announcement (on Saturday). Actually, it helps dispel any uncertainty surrounding the continuing speculation about interest rate movements in the mainland," said Castor Pang, a Hong Kong-based strategist at Sun Hung Kai Financial.

China's central bank said it would raise both the benchmark one-year lending rate and the one-year deposit rate by 27 basis points, to 6.39 percent and 2.79 percent respectively.

The rate hike helped Chinese insurers on expectations they will earn higher investment income on their investments of insurance premiums in fixed-income securities.

China Life, the biggest insurance company in China by revenue, soared 4.1 percent, Ping An Insurance rose 0.7 percent and PICC P&C was up 2.4 percent.

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