Hong Kong shares close firmer on China Mobile gains
Source: HONG KONG, May 23 AFP Published: May 23 2006, 7:28PM
Hong Kong share prices closed 0.37 per cent firmer today as gains in China Mobile and a rebound in commodity stocks helped the market reverse early losses, dealers said.
They said bargain-hunting and short-covering activity provided support but the overall mood was still cautious following yesterday's sell-off on the global markets amid uncertainty over interest rates.
The Hang Seng Index closed up 59.04 points at 15,864.56 at 15,864.56, off a low of 15,691.13 and high of 15,888.48 on turnover of $HK41.41 billion ($A7.05 billion).
"The market drew support from bottom-fishing as investors were searching for blue chips and select China stocks which over-corrected (yesterday) ... but investors were generally cautious," said Jackson Wong, investment manager at Tanrich Securities.
The Hang Seng Index tumbled over 500 points yesterday in a near panic sell-off as investors fretted that US interest rates will have to go higher, thereby dampening global growth.
Wong noted that China Mobile helped the benchmark index into positive territory but the upside was limited as Bank of China's share offer has locked up a huge amount of funds and sapped market liquidity.
He said the local market's near-term prospects really now depend on what happens in the United States, with a series of US economic data coming through over the next few days.
"The market is very data-driven ... any new lead on (US) rate trends can be used as an excuse to sell or buy," he said, adding that it is still not a good time for investors to buy as the market is too volatile.
China Mobile closed up 0.75 or 1.86 per cent at $HK41.00, driving the index's recovery, while oil and metal stocks found some support.
Lingbao Gold gained 0.35 or 4.58 per cent at 8.00 and Jiangxi Copper was up 0.60 or 9.09 per cent at 7.20.
In the oil sector, PetroChina added 0.15 at 8.45 and Sinopec rose 0.225 or 4.97 per cent at 4.75.
In the banks, HSBC was up 0.60 at 134.40 but BOC Hong Kong shed 0.10 at 15.25.
In the other majors, Sun Hung Kai Properties was 0.50 at 80.65 and Cheung Kong up 0.10 at 81.60.
The Hang Seng China Enterprises Index was up 47.33 points or 0.71 per cent at 6,691.35.
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