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SCMP Reporter

A LATE buying surge on blue-chip rumours wiped out morning losses on the Hang Seng Index yesterday.

  The familiar excuse of a lack of fresh incentives still caused many investors to sit back and wait for direction.

  The Hong Kong exchange remained in a narrow trading range, closing 24.87 points higher at 9,410.14 - a rise of just 0.26 per cent.

  Turnover was healthier after two days of thin trading, hitting $3.22 billion against a revised $2.57 billion on Tuesday.

  Volume was light, with 1.45 billion shares shifting hands.

  Some blue chips saw active trading in the late afternoon on positive rumours for Hang Seng Bank and CITIC Pacific, but morning trading was limited as a lack of liquidity kept investors looking elsewhere.

  Speculative trading in second and third liners continued to be active.

  Brokers blamed the summer holiday season for the relative stagnancy in the market, with a distinct lack of territory events causing yet another day of generally sideways, directionless trading.

  Seapower Securities analyst Patrick Chia said: 'What we are looking for in the local market is the interest rate movement in the US.'   Vickers Ballas research director Andrew Fernow said many buyers were sidelined awaiting corporate results due to be announced this month. 'On blue chips, one has to be a little bit cautious, so they are still awaiting upcoming results,' he said.

  He said Hang Seng Bank and Swire Pacific were expected to present solid growth figures within the next two weeks.

  Wall Street's slide of 8.1 points overnight gave initial guidance to the Hang Seng Index, with the market opening 56.76 points down on Tuesday's close of 9,385.27, at 9,328.51.

  The day's bottom of 9,286.99 was reached shortly before 11am and the index closed for the morning down 54.36 points, or 0.57 per cent, at 9,330.91.

  The early afternoon saw the losses steadily erased, with a strong surge in the 15 minutes before the close.

  Active trading in Hang Seng Bank was credited for helping lift the index in those remaining minutes.

   The bank said it would hold a news conference regarding its China business, leading to rumours of a sale of a stake to the Bank of China.

  Its stock surged $1.25 to close at $64.75.

  While other banks were mixed, the finance sub-index still managed a gain of 48.25 points, to 8,933.49.

  HSBC Holdings closed even at $104.50 cents, while Bank of East Asia shed 15 cents to close at $25.85.

  About-face rumours of solid square footage prices on bids for the prime Tamar basin site in Central helped boost property stocks after early worry had caused the sector to lose ground.

  Eight consortiums entered bids for the redevelopment of the site last week, and rumours abounded that CITIC Pacific would be declared the winner when an announcement was made this afternoon.

  CITIC shares closed 60 cents up at $21.45.

   HKR International, which also bid for the site, gained 25 cents to close at $6.15.

  Property stocks were up all round on the Tamar rumours, with the property sub-index rising 105.32 to 16,122.69.

  New World Development gained 20 cents, closing at $28.10 while Cheung Kong gained 60 cents to end the day at $39.20.

  Sun Hung Kai Properties saw a 50 cent rise, closing at $57.75, and Henderson Land was up 20 cents to $43.50.

  Utilities had a negative day, with much of the blame being placed on renewed worry over lower Hongkong Telecom earnings as a result of new competition.

   The utilities sub-index dropped 45.28 points to 10,493.92.

  Telecom lost five cents to close at $14.

   Hongkong and China Gas lost five cents, closing at $12.25, while Hongkong Electric shed 35 cents to close at $27.70.

   China Light closed even at $39.90.

  Controversial publisher Jimmy Lai made news yesterday, saying he may soon sell most of his 37 per cent stake in Giordano International, the clothing retailer he founded.

  The comments failed to add excitement to the company's stock, however, with shares closing even at $6.70.

   Giordano hit an intra-day low of $6.60.

  GK Goh Securities dealing manager Boby Ho said he expected the release of results in the coming weeks to have an impact on the market, but that it would be affected far more by movement on Wall Street.



Late buying surge wipes out early trade losses