Players make cautious purchases amid concern over oil prices and earnings

PUBLISHED : Wednesday, 20 September, 2000, 12:00am
UPDATED : Wednesday, 20 September, 2000, 12:00am

After Monday's carnage, the Hang Seng Index yesterday managed to end a mixed session up 117.04 points, or 0.75 per cent, at 15,677.2, thanks partly to a rebound in property stocks.

Oil prices and earnings fears are plaguing global exchanges but investors in Hong Kong felt the market had fallen too far and instigated a selective rebound.

The index declined to as low as 15,091.41 in morning trade after further falls on Wall Street.

'I think the market has been oversold for some time and we saw some bargain hunting around the 15,000-point level,' Tang Tai Securities associate director Kenny Tang Sing-hing said.

Key blue chips led the upswing, with Hutchison and Sun Hung Kai Properties accounting for 67.8 points of the climb. The property sector outperformed, with the sub-index rising 2.6 per cent.

'People were really expecting a rebound and the property sector is the more stable choice,' Celestial Asia Securities director Josephine Hui Suet-ming said.

Nonetheless, the gains were selective with Amoy Properties, Hysan and New World Development all ending lower.

The present market whipping boy, Pacific Century CyberWorks, managed a 2.38 per cent rebound to HK$10.75.

However, analysts felt a recent spate of failed deals might not have come to an end.

Ms Hui said: 'There is concern about the Telstra deal going through. Nothing's been confirmed by Telstra and there are no rumours, but investors have read so much recent bad news about CyberWorks recently that there is this worry.'

In April, Australia's Telstra and CyberWorks formed an alliance intended to create Asia's largest Internet protocol and mobile telephone business.

Mainland-related stocks were notably absent from the day's upward movers.

The H-share index fell 1.26 per cent and the red-chip index declined 2.38 per cent.

There are a large number of oil-sensitive counters on these indices but analysts were cautious about blaming the falls on high oil prices.

'Unless we see this oil crisis lasting for another half year or so, this impact will be short-lived and the impact on China's economy shouldn't be that bad unless the United States economy slows down,' SG Securities China research head Laura Luo said.

'People have become more cautious about China stocks and have decided to wait on the sidelines,' she said.

Mr Tang said the direction of the market would depend on the performance of overseas markets and the price of oil, although Ms Hui remained downbeat.

'I don't think the rebound can last long - one or two days - and then we'll test the bottom again.'

Leading Internet stocks helped push the Growth Enterprise Market (GEM) down 1.1 per cent. Sunevision fell 5 per cent to $5.70 while Henderson Cyber was 5.49 per cent lower at 86 cents.

The GEM fell below the 400-point barrier in intraday trade for the first time and closed at a record 410.21 - 58.97 per cent below the index's March launch.