Hong Kong shares higher in rebound after yesterday's drop, Fed comments UPDATE

Hong Kong shares higher in rebound after yesterday's drop, Fed comments UPDATE

	Published : Thu, 01 Feb 2007 03:56 By : Agencies Print this Story

HONG KONG (XFN-ASIA) - Share prices were higher in early trade in a rebound following yesterday's sharp drop, with a positive lead from the US aiding the recovery, dealers said.

Wall Street gained overnight after the US Federal Reserve left interest rates unchanged as expected and made some upbeat comments on the economy and inflation outlook.

However, trade in China stocks remained volatile as investors remain edgy after a mainland official voiced concerns that the country's stock markets may be overheating.

At 10.28 am, the Hang Seng Index was up 110 points or 0.55 pct at 20,216.42, off a low of 20,212.75 and high of 20,321.32.

Turnover was 8.09 bln hkd.

'Interest in blue chips and select H-shares helped the market recover from its sharp fall yesterday,' said Matthew Kwok, head of research at Tanrich Securities.

'While there was continued selling in some H-shares, the pressure was not as strong as yesterday's,' he said.

China Mobile's strong gains and positive news from Wall Street were significant factors that helped the market's recovery, he said.

China financials were mixed, with China Construction Bank up 0.01 hkd or 0.22 pct at 4.61, Bank of Communications flat at 8.43 hkd, ICBC down 0.01 hkd or 0.22 pct at 4.52, Bank of China down 0.01 hkd or 0.26 pct at 3.85, China Life up 0.05 hkd or 0.22 pct at 22.85 and PICC up 0.04 hkd or 0.87 pct at 4.62.

Among blue chips, China Mobile was up 1.10 hkd or 1.54 pct at 72.70, HSBC up 0.60 hkd or 0.42 pct at 142.90, Hutchison Whampoa up 0.75 hkd or 0.97 pct at 78.35 and Swire Pacific up 0.35 hkd or 0.39 pct at 90.

Kwok said HSBC's gains might have been due in part to the Fed's comments on stabilization of the housing market in the US.

'Unlike last year, the performance of HSBC's US unit may not be hit this year because of positive signs in that country's housing market,' he said.

Among other local banks, Hang Seng Bank was up 0.50 hkd or 0.46 pct at 109, Bank of East Asia down 0.05 hkd or 0.11 pct at 44.80 and BOC Hong Kong down 0.05 hkd or 0.25 pct at 20.35.

Kwok said the Fed's decision to keep interest rates steady, although expected, helped boost interest in property stocks.

'The positive outlook for interest rates, coupled with the fact that the sector is not affected in any way by recent weakness in H-shares and A-shares, were a positive for properties,' he said.

Among properties, Cheung Kong was up 1.60 hkd or 1.56 pct at 104.40, Henderson Land up 0.35 hkd or 0.78 pct at 45.45, Sun Hung Kai Properties up 1.10 hkd or 1.16 pct at 95.60 and Sino Land up 0.22 hkd or 1.25 pct at 17.76.

The property sub-index was up 358.44 points or 1.47 pct at 24,735.27.

New listing Wuyi Pharmaceutical was at 2.0 hkd, up 11.11 pct from the IPO rice of 1.80. It opened at 1.97 hkd and hit a high of 2.02 hkd.

Oil stocks were mixed, with PetroChina up 0.01 hkd or 0.10 pct at 9.58, Sinopec down 0.02 hkd or 0.31 pct at 6.51 and CNOOC down 0.04 hkd or 0.60 pct

Elsewhere, Chalco was up 0.14 hkd or 2.01 pct at 7.10, China Unicom up 0.06 hkd or 0.57 pct at 10.54, Angang New Steel down 0.06 hkd or 0.49 pct at 12.16 and Zijin Mining up 0.04 hkd or 0.83 pct at 4.88.

(1 usd = 7.8 hkd)

jun.concepcion@xfn.com

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