Banking giant HSBC saw its shares soar in Hong Kong and London today, rising the most in four months on news of talks with sovereign wealth fund China Investment Corporation.

The company gained more than 4% to HK$125 (802p) in the morning session, while in early trading in the City they were up 9p to 803p.

HSBC chairman Stephen Green has met officials from the Chinese fund several times in recent months to discuss the possibility of CIC buying HSBC shares in the open market, according to a report at the weekend.

"We are not able to comment on particular meetings," a Hong Kong-based HSBC spokesman said today.

A Beijing-based spokeswoman at CIC, Wu Xieling, also refused to comment on HSBC specifically but said: "We're looking at equity stake investments globally and are considering various opportunities in different countries."

It is understood the CIC talks included the possibility of HSBC becoming the first foreign bank to list in Shanghai.

The historically risk-averse HSBC was the first global bank to own up to big losses on the subprime housing market in the US and wrote off more than $10 billion (£5 billion) on its investment there.

Its shares are down 6% this year, a significantly better performance than the wider sector that has seen the FTSE 350 banking index fall 28% over the same period.

CIC manages China's $200 billion in Chinese foreign reserve funds earmarked for investment at home and abroad. It has already sunk some $8 billion into stakes in private equity group Blackstone and investment bank Morgan Stanley.

So far both of those investments have declined in value and that experience, along with the recent Freddie Mac and Fannie Mae crisis has led some analysts to expect CIC to look towards investments in Asia and Asia-focused companies such as HSBC.