Chinese mainland stocks in Hong Kong posted their biggest gain in a month as insurers rallied.

The Hang Seng China Enterprises Index climbed 1.6 percent to 9,840.26 at the close. Insurers accounted for five of the seven biggest gainers, with China Life Insurance Corp having its largest one-day advance since August 2015. Analysts saw a range of reasons for the sudden rally, from speculation that Chinese mainland pension funds are about to enter the stock market to bets higher borrowing costs would boost investment yields.

Investors have been waiting for the country's local retirement savings managers to put their money into equities after policy makers announced rule changes in 2015. The mainland last week raised the interest rates it charges in open-market operations and on funds lent via its Standing Lending Facility.

"H shares are rallying as investors are speculating that pension funds will be allowed to invest in the stock market soon," said Linus Yip, First Shanghai Securities strategist in Hong Kong. "It's a big positive catalyst for insurers, who are managers of most of those funds, as they will be able to diversify their portfolios and investment yields will get boosted."

Chinese investors are returning from the weeklong Lunar New Year holiday that ended on Feb 2, after turnover on the nation's exchanges slid on Friday to the lowest for full-day trading since August 2014.

The Hang Seng Index rose 1 percent, while the Shanghai Composite Index added 0.5 percent. China Life surged 7.5 percent in Hong Kong, while New China Life Insurance Co gained 6.8 percent.

The country's pension fund managers have been handing over some of their cash to the National Council for Social Security Fund, which will oversee their investments in securities, including equities.