Hong Kong shares close morning little changed ahead of Hong Kong/U.S. GDP data

HONG KONG (AFX-ASIA) - Share prices closed the morning little changed amid cautious sentiment ahead of the release of first quarter Hong Kong GDP and revised first quarter U.S. GDP data due later today, dealers said.

They said red chips and H shares continued their upward trend on the back of optimism about China's economic growth, as rotational buying boosted small cap stocks while blue chips remained stagnant.

The Hang Seng Index was up 6.09 points at 13,816.69, off an early low of 13,799.80 and a high of 13,956.69, on turnover of 5.85 bln hkd.

The Hang Seng May contract last traded at 13,825 points.

The Hang Seng China Enterprises Index was up 7.20 points at 536.94 and the CAC Index up 11.28 points at 1,309.23.

TraHK was up 0.05 at 13.95 hkd.

The GEM index was up 4.99 points at 270.46 on turnover of 252.36 mln hkd.

The market opened higher on Wall Street's modest overnight gains before succumbing to profit taking, dealers said.

"Profit taking selling has been expected. Market sentiment has turned cautious ahead of the GDP data announcements, prompting investors to lock in profit," Peter Lai, director with OCBC Securities, said.

Lai said investors remained uncertain over the U.S. economic outlook despite interest rate cuts amounting to 250 basis points since the beginning of the year.

China Mobile gained 0.30 to 40.60 hkd and China Unicom rose 0.45 to 12.85.

Hutchison Whampoa fell 0.25 to 87.00. The company said it expects to announce a new port investment project in China soon.

Pacific Century CyberWorks was unchanged at 2.675 after the company said its joint venture with Telstra Corp, Regional Wireless, will submit a bid for Singapore's MobileOne next week.

Lai said he was positive about U.S. Fed chairman Alan Greenspan's remarks today.

"Greenspan said inflation is likely to be contained. He probably indicated the Fed will further cut interest rates to boost the economy," Lai said.

HSBC gained 0.50 to 100.50, while Hang Seng Bank fell 0.75 to 88.25.

Sun Hung Kai Properties fell 1.00 to 76.75, Henderson Land lost 0.70 to 37.50 and New World Development shed 0.10 to 10.10.

Cheung Kong fell 1.25 to 92.75 after chairman Li Ka-shing said Cheung Kong Group has no immediate plan for restructuring.

CITIC Pacific rose 0.10 to 26.25 after it raised the size of the 10-year global bond issuance to 350 mln usd from 300 mln usd.

First Pacific gained 0.05 to 1.71. 

Lai said buying in China plays remained strong.

Qingling Motors rose 0.125 to 2.125 on expectations that demand for trucks will be boosted by China's efforts to develop its western area.

Harbin Power gained 0.04 to 1.02 and Jiangxi Copper added 0.05 to 1.07. 

China Overseas rose 0.08 to 1.40 on institutional buying. 

Shanghai Industrial gained 0.15 to 14.20, while China Resources fell 0.20 to 12.65.

Dealers said rotational buying boosted the small cap sector as trading of blue chips was lacklustre this morning.

However, they said investors should exercise caution since many small caps remain unprofitable.

Prime Success gained 0.025 to 0.159 and Victory Group added 0.004 to 0.03.

Sino-I.com gained 0.014 to 0.115 and Honko International rose 0.008 to 0.062.

City Telecom extended gains, up 0.16 hkd or 21.33 pct to 0.91 hkd on trade of 28.04 mln shares, after its interim results.

On the GEM board, tom.com rose 0.10 to 2.30 and Sunevision gained 0.04 to 1.86.

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