ANALYSTS believe the Hang Seng Index has largely discounted the impact of today's expected rise in retail interest rates following the Hong Kong Monetary Authority's decision to match the United States Federal Reserve's rise in wholesale rates. But relief over the rise could be offset by growing fears of the looming trade war between China and the US and nagging concerns about corporate earnings. On Monday, the index ended the Year of the Dog with a whimper, rising 45.53 points, or 0.62 per cent to 7,342.65. Turnover was thin at $1.27 billion as many brokers took advantage of the Lunar New Year holiday to take a break, while overseas institutional buyers were content to stay on the sidelines. In trading of Hong Kong stocks listed in London, the Hang Seng London Reference index was up 89.3 points, or 1.22 per cent, from the previous close of the Hang Seng Index at 7,431.95. On Monday, the market drifted down in early trading, slipping to 7,269.63 points before beginning its climb to a mid-morning level of 7,278.21 points. For the remainder of the morning, the index drifted in a range of about 64 points, finishing the day at 7,342.65 points. During the session, it reached a high of 7,343.63 points and a low of 7,267.39 points. Property stocks were some of the strongest performing blue chips of the day, with the sub-index closing about 203 points, or 1.68 per cent, higher at 12,246.66 points. Sun Hung Kai Properties advanced 60 cents to close at $42.50, while Henderson Land rose 50 cents to $34.10. However, many traders are holding back until the position on interest rates becomes clear. The conglomerates sub-index rose just over one per cent, or 59.20 points, to close at 5,520.77, while the finance index closed almost nine points, or 0.14 per cent, higher at 6,275.69 points. Hutchison Whampoa rose 40 cents to $27.45, while Wheelock increased 65 cents to $11.20. The utilities index finished the day nearly 69 points, or 0.74 per cent, lower at 9,178.72. This was largely a result of Hongkong Telecom falling 20 cents to $13.60 on continuing concerns that it will fall short of its profit targets for this year. There is growing optimism that US President Bill Clinton's announcement of a new aid package for Mexico could have a spin-off for the Hong Kong market, with improving sentiment towards emerging markets. Elton Cheung of Tai Fook Securities, meanwhile, has undertaken research which he claims proves a link between trading on the first day of the Lunar New Year and the performance of the Hang Seng Index throughout the rest of the year. 'Our findings tell that in years where we have a higher closing on the first day after the Chinese New Year, we are very likely to have a good year with a year-end closing higher than the year's opening level,' he said. 'On the other hand, if the first trading day of the new year ended with losses, the year would be a falling year in most cases. 'The relationship between returns statistically exists, rather than being just a co-incidence. 'It cannot be merely superstition that accounts for the relationship.' Mr Cheung noted that the Hong Kong stock market had experienced long up-cycles,but short corrective down-cycles over the past 25 years. For the statistically minded, of the seven years which recorded negative returns - 1973, 1974, 1977, 1981, 1982, 1987 and 1994 - five had lower closing prices on the first day of the Lunar New Year. For the 18 years in which the market provided positive returns, only four opened the year lower. 'Those years which had negative yearly returns were really bad years, like the 1973 crash and the confidence crisis during the early 1980s, the 1987 crash and the 1994 bear market,' Mr Cheung said.