Hong Kong shares close higher after US gains; easing Sino-US tension
HONG KONG (AFX-ASIA) - Shares prices closed higher in the wake of good gains in U.S. stockmarkets last night and an easing of tensions between the U.S. and China regarding a mid-air collision between military aircraft from the two counties, dealers said. Nonetheless, doubts exist about whether U.S. stockmarkets can rise again this evening given the uncertain global economic outlook, they added. The Hang Seng index closed up 322.90 points at 12,386.61, off a high of 12,606.15 and a low of 12,374.53, on turnover of 8.69 bln hkd. The Hang Seng April contract last traded at 12,440 points. The Hang Seng China Enterprises index closed up 2.63 points at 407.64 and the CAC index gained 8.15 points to 1,007.86. TraHK gained 0.30 hkd to 12.60 on volume of 7.26 mln units. The GEM index closed down 0.06 points at 255.57 on turnover of 85.16 mln hkd. Michael Ng, dealing director with Sassoon Securities, said: "Enthusiasm began to run out of steam with investors worrying about the latest developments on Wall Street over the weekend." Josephine Hui, director with Celestial Asia Securities, said: "It is difficult to tell whether the DJIA could breach its key 10,000 point mark or not later today. Even if it could, it is very unlikely that the Dow could sustain that level amid a weak economic outlook." Hui added that sentiment remained cautious ahead of the release tonight of U.S. non-farm payrolls data. Some investors resorted to profit-taking in Hong Kong ahead of this data and this was most noticeable in the property sector. The HSI property sub-index dropped 80.03 points to 16,185.59. Within the sector, Cheung Kong shed 0.50 to 80.00 hkd, Henderson Land dipped 0.50 to 36.00, Sun Hung Kai Properties lost 1.25 to 70.25, New World Development fell 0.40 to 8.70 and Sino Land eased 0.025 to 3.225. On a brighter note, the telecoms sector finally saw renewed buying. Among telecom stocks, China Unicom climbed 0.75 to 8.60 and China Mobile adv anced 3.30 or 11.11 pct to 33.90, ahead of the release of its 2000 results on 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 fell 0.25 to 78.00 and SmarTone gained 0.60 to 9.00. PCCW extended recent losses. Ricky Tam, director of research with Pacific Challenge, said: "PCCW declines were not related to hedging activities regarding Cable & Wireless' 1.50 bln usd in exchangeable bonds convertible to PCCW shares. It's just the overall earnings outlook on the company remains bleak." PCCW ended 0.075 lower at 2.525, off an early high of 2.80, on volume of 102.12 mln shares. In the financial sector, HSBC rose 1.75 to 91.50, Hang Seng Bank gained 0.75 to 90.75 and Bank of East Asia shed 0.35 to 16.60. Dao Heng Bank and its parent Guoco Group were suspended, pending an announcement. Dao Heng Bank last traded at 37.60 and Guoco Group last traded at 27.50. 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. Among red-chips and H-shares, Tianjin Capital closed up 0.18 at 1.57, Chongqing Iron up 0.12 at 0.85 and Harbin Power up 0.06 to 0.64. Onfem Holdings finished up 0.025 at 0.375, Founder up 0.01 at 1.58 and Zhu Kuan Development up 0.01 at 0.38. On the GEM board, tom.com dropped 0.075 to 2.00, hongkong.com rose 0.01 to 0.28 and Sunevision lost 0.12 to 1.98. RNA closed up 0.049 at 0.20, Tem Fat Hing Fung dropped 0.004 to 0.048 and Can Do fell 0.037 to 0.156. The three companies were involved in a debt restructuring deal with Cheung Kong. I-Cable finished up 0.275 at 3.65 on the back of recent news TVB unit Galaxy, an i-Cable rival, may not roll-out its pay TV services due to financing problems.
Related stock : (NIL)