Hong Kong stocks have gained for three trading days in a row as buying and selling remained robust, pointing to improving investor confidence in Hong Kong business environment.

The benchmark Hang Seng Index surged 3.81 percent, or 966.04 points, to 26,339.16 points on Monday.

The Law of the People's Republic of China on Safeguarding National Security in the Hong Kong Special Administrative Region took effect Tuesday and the market responded positively, experts said.

The turnover on Monday rose to 250 billion Hong Kong dollars (32.25 billion U.S. dollars), marking a new high in more than two years and showing strong momentum of the market, Yang Yuchuan with Prime China Securities said.

Observers said a better-than-expected mainland economy also made mainland and related markets more attractive to global funds.

Major stocks posted strong performance. Hong Kong Exchanges and Clearing Ltd rose over 2 percent to 353.4 Hong Kong dollars, and CK Asset Holdings Ltd went up over 3 percent to 49.2 Hong Kong dollars. Bank of China (Hong Kong) Ltd rose over 4 percent to 3.16 Hong Kong dollars.