Hong Kong equities closed higher on Friday, with market sentiment boosted by China's decision to lower a key benchmark rate.

The Hang Seng Index rose 2.96 percent, or 596.56 points, to 20,717.24.

Both the mainland's indexes also closed higher. The Shanghai Composite Index jumped 1.60 percent, or 49.60 points, to 3,146.57, while the Shenzhen Composite Index rose 1.59 percent, or 30.97 points, to 1,983.67.

On Friday morning, the People's Bank of China announced it would lower its five-year loan prime rate, a key interest rate governing how lenders base their mortgage rates, from 4.6 percent to 4.45 percent. (AFP)