Hong Kong shares close morning higher on Wall St, easing Sino-U.S. tensions

HONG KONG (AFX-ASIA) - Share prices closed sharply higher on a technical rebound, backed by the strong gains in Wall Street last night, dealers said.	    They said investors also reacted positively to the easing in Sino-U.S. tensions after U.S. President George W. Bush expressed regret over the Chinese pilot, missing since last weekend's collision between his fighter jet and a U.S. surveillance aircraft.	    The Hang Seng Index closed the morning up 420.88 points at 12,484.59, off a high of 12,606.15 and a low of 12,446.24, on trade of 5.00 bln hkd.	    The Hang Seng April contract last traded at 12,495 points.	    The China Enterprises Index was up 2.37 points at 410.38 and the CAC Index was 20.36 higher at 1,020.07.	    TraHK fell 0.40 hkd to 12.70 on volume of 4.54 mln units.	    The GEM index was up 2.39 points at 258.02 on turnover of 58.48 mln hkd. 	    Josephine Hui, director of Celestial Asia Securities, said strong performance in Wall Street was the key factor behind today's rally.	    "However, it would be over-optimistic if we considered today's rally as a turnaround in underlying sentiment ... the U.S. stock markets were weak and will be volatile in the near term," she said.	    She said the atmosphere in China-U.S. discussions had improved, after President Bush offered his condolences for the lost Chinese pilot.	    "The easing in Sino-U.S. tension was also used as an excuse to push up the index," she said. 	    The technical rebound was most evident in Telecom stocks, although buying interest was evenly distributed across the board, dealers said. 	    Among telecom stocks, China Unicom was 0.75 firmer at 8.60 and China Mobile finished up 3.20 at 32.90, ahead of the release of its 2000 results next Monday.	    China Mobile is expected to report a net profit of 18.56-19.50 bln yuan for 2000, up from 4.79 bln yuan a year earlier.	    Hutchison added 1.25 to 79.50 and SmarTone was up 0.55 at 8.95.	    PCCW was up 0.025 at 2.625, following news that its joint venture with Telst ra Corp may bid for MobileOne. Meanwhile, PCCW said it has no plan to reduce its stake in the Cyberport project.	    In the financial sector, HSBC rose 2.50 to 92.25, Hang Seng Bank gained 1.75 to 91.75 and Bank of East Asia added 0.10 to 17.05.	    Dao Heng Bank and its parent Guoco Group were suspended, pending an announcement related to a possible corporate transaction.	    Dao Heng Bank last traded at 37.60 and Guoco Group last traded at 27.50.	    Among properties, Cheung Kong ended up 0.75 at 81.25, Sun Hung Kai Properties was 0.75 higher at 72.25, and Hysan Development rose 0.95 to 11.40.	    Dealers said red-chips and H-shares were rising in line with the broader market rally, with an additional boost from easing China-U.S. tensions.	    "In terms of prospect, red-chips and H-shares should be better choices for investors, because of China's imminent WTO membership," he said.	    Among red-chips and H-shares, Tianjin Capital was up 0.11 at 1.50, Chongqing Iron rose 0.07 to 0.80, and Harbin Power gained 0.05 to 0.63.	    Onfem Holdings was up 0.03 at 0.38, Founder was 0.05 higher at 1.62, and Zhu Kuan Development was up 0.025 at 0.395.	    On the GEM board, tom.com was unchanged at 2.075, hongkong.com rose 0.02 to 0.29, and Sunevision added 0.05 to 2.05.	    Elsewhere, RNA was up 0.031 at 0.182, Tem Fat Hing Fung rose 0.001 to 0.053, and Can Do fell 0.025 to 0.168. The three companies were involved in a share transaction with Cheung Kong. 	    I-Cable finished up 0.30 at 3.675, on continued reaction to earlier news that TVB unit Galaxy may not roll-out its pay TV services, after the delay of funding from Astro Broadcast Corp. 

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