Lack of leads caps gains
The Hang Seng Index rose moderately in quiet trade yesterday, failing to regain the 13,000-point level.
The index gained 84.47 points, or 0.66 per cent, to 12,844.93 on a turnover of $6.94 billion.
Several blue chips saw their prices bounce amid the illiquid trade, with Cathay Pacific rising 4.51 per cent to $13.90 and First Pacific gaining 3.14 per cent to $4.925.
The two blue-chip hotel stocks also gained - Hongkong and Shanghai Hotels climbed 6.25 per cent to $5.95 and Shangri-La added 3.16 per cent to $8.15.
Nevertheless, the index closed off earlier highs even as other regional markets rallied, led by Japan.
'There's not much direction. The outlook isn't terribly exciting,' said Dao Heng Securities head of research Raymond Chong, pointing to the overhang of the government stock portfolio, lacklustre residential property sales and stalled World Trade Organisation talks.
'If you discount euphoria of Internet plays, there is very little propelling the market forward,' Mr Chong said.
Internet plays made up 14 of the 20 heaviest traded stocks yesterday.
China Telecom gave the market its biggest upward push, adding 30.9 points to the Hang Seng Index as it rose 2.38 per cent to $23.65.
The rise followed a series of losses on share placement concerns and came after the company announced revenues would be boosted by a 10 per cent cut in the prices it paid to lease transmission lines from the mainland telecommunications regulator.
Meanwhile, the other telecommunications blue chip, Cable & Wireless HKT, eased 0.58 per cent. It is now trading at $17.10, having all but lost the gains achieved earlier in the month after announcing an alliance with Internet equipment maker Cisco Systems of the United States.
'The Cisco rise was sentiment related and you need continued good sentiment to sustain [such] rally,' said ABN Amro analyst Joe Locke.
He said investors still valued the firm's Internet potential, attributing recent losses to the general downturn which this week pushed the index below the 13,000-point level for the first time since June 6.
'Markets in general are down and [with its heavy weighting] this is a great proxy stock,' Mr Locke said.
In the broader market, Wing Hang Bank gained 4.82 per cent to $25 even as other second-tier banks lost ground.
A steady drop in interbank rates this month means fatter margins for banks, which normally boost share prices. However, other concerns have kept banks depressed, such as fears of Y2K-related bank runs later this year.
Analysts said the monetary authority's plan to extend liquidity to banks in case of mass withdrawals should reassure investors.