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SCMP Reporter

PROFIT-TAKING in afternoon trade eroded morning gains, sending the Hang Seng Index well below the 8,600 level yesterday.

  The index closed down 0.16 per cent, or 14.12 points, at 8,580.31 points, against the morning trade which stayed above the 8,600 level.

  However, trade volume picked up with a turnover of $3.7 billion.

  The market continued to see overseas buy orders especially from United States and Japanese funds keen to buy banking stocks, brokers said.

  Jenny Ting of Mansion House said: 'The stocks were little changed. The Hong Kong market just followed Wall Street whose performance was strong overnight.'   The Dow Jones industrial average was up 0.25 per cent to close 10.03 points higher at 4,083.68 points. The Hong Kong market slipped its 8,500 anchor to surge through 8,600 level shortly after the opening.

   It was up 25 points to 8,619.56 points from Monday's close of 8,594.43 points in the first 15 minutes of trade.

  At one stage, the index hit the day's high at 8,659 points before sliding to 8,614.20 points at the morning close. It was up 0.23 per cent or 19.77 points.

  Giant brokerage houses, such as Morgan Stanley, Jardine Fleming and S G Warburg, were the most active players.

  The market lacked momentum to rise and investors began to take profit after the index touched 8,600.

   The afternoon trade opened lower and continued to slide.

  Ms Ting said there was neither positive nor negative news in the market.

  Negative news such as interest rate rises had already been discounted or was neutral to the market.

  However, the prevailing positive sentiment was not enough to boost confidence of local managers, and they remained inactive.

 OCBC Securities senior manager Priscilla Ng said local fund managers were not eager to either raise or reduce their weightings in the Hong Kong market.

  'They think the market is still volatile and would like to retain the status-quo,' Ms Ng said.

  After the accumulated index rise, up 7.36 per cent last week, Ms Ting said the market was now at a high level and was looking for some consolidation at the 8,600 level before pushing further to 8,800.

  Ms Ng expected the market would trade in a narrow range.

  Investors are waiting for a number of company results due to be released this week.

  They include major blue chips Cheung Kong, Hutchison Whampoa and Sun Hung Kai Properties.

  'It is expected that these results will be in line with market expectations,' Ms Ng said.

  The investors would also have their eyes on this week's US economic data and two government land auctions next week - on Monday and Thursday.

   Despite an overall fall in the market, banking stocks continued to be strongly supported by the improved property market which had seen a pick-up in demand for apartments, Ms Ting said.

  The sector went against the downward trend to rise 14.02 points, or 0.19 per cent, to 7,321.03 points.

  The utilities sector outperformed the market, with the sub-index rising 0.19 per cent, or 19.48 points, to 10,427.70 points.



Early gains go despite growth in turnover