Blue chips extend surge to breach 15,000 barrier
HSBC leads rally as brokers and investors pile in and turnover increases to $27b
Hong Kong stocks extended their charge to fresh four-year highs yesterday, closing above the psychologically important 15,000-point barrier with the help of HSBC and other banking counters.
The global banking giant led the way as a broad surge among blue chips pushed the Hang Seng Index up 158.2 points, or 1.06 per cent, to close at 15,137.08 points - its first breaching of the 15,000 level in 4? years.
Turnover increased to $27.06 billion from $20.03 billion on Monday.
'It's up, up and away,' said Fulbright Securities general manager Francis Lun Sheung-nim. 'We're in the stratosphere now.
'It's a broadly based rally,' he added. 'I think there's a fundamental change on the part of the big brokers. The bears have been converted to bulls and they don't want to miss the train.'
Index gainers outnumbered losers 24 to six, with heavyweight HSBC climbing 1.02 per cent to $128.50 after it beat analysts' forecasts and reported first-half profit growth of 9 per cent.
Subsidiary Hang Seng Bank, which also reported a better than expected interim result, edged up 0.09 per cent to $107.90.
Bank of East Asia, which will announce its interim result today, added 1.05 per cent to $24.
BOC Hong Kong jumped 1.59 per cent to a record high of $16 since its listing on July 25, 2002. The counter was the second-most actively traded stock on turnover of $1.43 billion.
Non-index banking stocks also saw heavy buying. Standard Chartered Bank rose 0.76 per cent to $157.60, Wing Hang Bank added 3.09 per cent to $58.30, Dah Sing Bank gained 0.63 per cent to $15.75, and Citic International Financial jumped 3.15 per cent to $3.28.
China Mobile, the mainland's largest mobile service provider, surged 1.42 per cent to a high of $32.10 after Goldman Sachs raised the target price of the stock to $33.50, reflecting recent growth figures and the yuan's revaluation. Between them, HSBC and China Mobile accounted for almost half of the index's gains, or 47.2 per cent.
Rocketing oil prices also ensured a sterling performance from oil stocks. New York September crude climbed to US$61.57 a barrel following the death of King Fahd of Saudi Arabia, the world's leading oil exporter.
CNOOC gained 2.8 per cent to $5.50 and Sinopec rose 1.47 per cent to $3.45, while PetroChina, the country's largest oil producer, surged 4.26 per cent to another high of $7.35. The H-share heavyweight pushed the index to finish higher at 5,377.68, adding 79.29 points or 1.5 per cent.
After the counter had risen 23.5 per cent in the past two weeks, there were market rumours that PetroChina was testing the waters for a share placement yesterday. A PetroChina spokesman denied the rumours.
Peter Lai Wing-leung, a director of sales at DBS Vickers, said the oil price had peaked and he did not expect it to rise to US$65 a barrel.
CNOOC's rise was related to the pullout of its Unocal bid, said Mr Lai, adding: 'CNOOC's shareholders are celebrating the cancellation of the bid.'
After the sustained rise in the benchmark index, some brokers believed that it might be time for corrections.
August index futures closed at 15,130 yesterday, 7.08 points lower than the underlying index.
DBS's Mr Lai said although the momentum was still very strong, all the so-called indicators showed the market was over-bought and a correction would take place in the short term, with the first resistance level at 15,400 to 15,500.
