A STRONGER US dollar and an improved performance in the Japanese and Taiwanese markets helped the Hang Seng Index to stage a technical rise yesterday. Previously oversold blue chips closed mostly higher. The Hang Seng Index rose for the second day, finishing up 53.74 points or 0.6 per cent at 8,985.05. Turnover improved to $3.16 billion from a revised $3.05 billion on Tuesday. Volume was light, with 1.51 billion shares changing hands. 'The Japan and Taiwan stock markets had quite a strong rebound, and that helped to stabilise market sentiment,' said Dharmala Securities research director Ben Kwong. 'Also, the strength of the US dollar helped US-based foreign investors. 'But it is mainly technical. The market has been quite heavily oversold.' Kleinwort Benson head of sales Nial Gooding agreed the rise was mostly technical, after having recovered only slightly on Tuesday after eight straight sessions of losses. He said the strengthening Japanese market would have an effect on the Hang Seng Index in the coming weeks, but that it would have only a small impact in the short term. 'There's a lot of people asking why it [the index] went up,' Mr Gooding said. 'In terms of what the world is looking at, Japan is the market. In time, that will have a profound effect on the world's financial markets - profoundly good. But that is in the longer term.' The index opened 28.25 points lower on news of an overnight fall on Wall Street, but the negative mood was quickly erased, with a steady climb soon after 11.30 am as the day's high of 9,054.34 was reached. Signs of a struggle to maintain support at 9,000 began to show, with a slight fall to the morning's end. The index closed at the end of the early session at 9,008.86, up 77.55 points or 0.87 per cent. The afternoon got off to a negative start, with a fall to the 8,960 level at 3 pm. Again testing the 9,000 level, the round number was reached at 3.30 pm but could not be sustained. The index fell in the final 15 minutes of trading. Wharf had a mixed day, with the company reporting a 73 per cent rise in attributable earnings for the interim, mostly on a controversial asset swap. It was initially seen as negative, with the stock dropping to an intra-day low of $22.05 shortly after the afternoon opening. A more favourable view on higher rental incomes in the second half, covering losses in the cable television sector of the company's business, caused a recovery in the final hour of trading. Shares closed 10 cents higher at $22.45. Healthy trading in Hongkong Telecom helped to push up the Hang Seng utilities sub-index to close 167.56 points or 1.68 per cent higher at 10,141.02. Telecom rose 30 cents to $13.60 on a Salomon Brothers report that forecast the company's share price would climb at least 35 per cent over the next 12 months. Telecom won the number two spot in the top 10 most traded by turnover, with $199.55 million worth of shares changing hands. Hong Kong and China Gas gained 20 cents to $12.15. Hongkong Electric was up 15 cents at $26.15 and China Light & Power added 50 to $38.40. Property counters were mixed, with Cheung Kong climbing strongly to help boost the sector overall. The Hang Seng properties sub-index rose 105.64 points or 0.71 per cent to close at 15,020.05. Cheung Kong, expected to report solid interim earnings growth next week, gained 50 cents to $37.40. New World Development rose 60 cents to $27, Hopewell edged up 10 cents to $5.70. Sun Hung Kai Properties went against the trend to lose 25 cents to $52.50. The finance sector was dragged down on a decline in HSBC, with the Hang Seng banking sub-index shedding 23.98 points or 0.28 per cent to close at 8,562.41. HSBC lost 50 cents to $101, Hang Seng Bank was unchanged at $61 and Bank of East Asia closed up 20 cents at $24.20. The Hang Seng MidCap 50 index rose 8.7 points or 0.7 per cent to close at 1,248.69. Brokers said they expected the market to continue testing the 9,000 level to the end of the week and expected the market to remain stuck in narrow-range trading unless there was drama from Wall Street. Seapower Securities analyst Patrick Chia said the index could sink below 8,800. 'But unless there is a surprise on Wall Street . . . the market will be quiet.'