Hong Kong shares off lows on technical rebound; bargin hunting in China plays

HONG KONG (AFX-ASIA) - Share prices were off their lows in afternoon trade on a technical rebound, with substantial bargain hunting in red-chips and H-shares, dealers said. They said the Hang Seng Index received additional support from gains in utilities as they are seen as safer investment alternatives during market uncertainty. At 3:42 pm, the Hang Seng Index was down 275.32 points at 13,501.40, off a low of 13,277.52, on trade of 8.46 bln hkd. The China Enterprises Index was down 3.08 points at 376.31 points, and the CAC Index fell 9.45 points to 1,079.20. Marty Chan, an analyst with Polaris Securities, said the Hang Seng Index staged a technical bounce in late trade, although sentiment should remain cautious for the next couple days. "Bargain hunting was remarkable in red-chips and H-shares as they are seen having little downside risk ahead of China's imminent entry to the World Trade Organisation," he said. Among those stocks, China Eastern Airlines was down 0.01 at 1.03, off a low of 0.97, and Yizheng Chemical was up 0.01 at 1.45. Chan said major blue-chips remained unattractive in the afternoon, weakened by the sharp losses in HSBC after its downgrade byGoldman Sachs. HSBC was down 1.0 at 98.50, Bank of East Asia was 0.4 lower at 17.70, and Hang Seng Bank was down 0.25 at 89.25. PCCW was 0.05 lower at 4.025, Hutchison dropped 1.75 to 84.50. Dealers said property stocks failed to recoup some of their losses in the morning given concerns the U.S. Federal Reserve may not cut rates as aggressively as previously expected. Cheung Kong was down 1.25 at 87.75 and Sun Hung Kai Properties fell 3.25 to 76.0. Great Eagle was up 0.05 at 13.10, after its 2000 results and heavy recent losses which were seen to have limited the downside for the stock, dealers said.

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