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SCMP Reporter

TRADING was light and lacked direction but stocks closed generally higher yesterday despite the Federal Reserve's failure to cut interest rates in the United States.

  The Hang Seng Index, after hitting an intra-day high of 9,659.56, ended 67.26 points or 0.7 per cent higher at 9,650.6.

  Turnover was a light $2.75 billion but still up from Tuesday's adjusted $2.4 billion.

  The index was led by a solid day for banks and property counters, with Cheung Kong and Henderson Land adding to gains in the property sector.

  All major sectors were up and of the 33 blue chips, 22 saw gains, three recorded losses and eight were unchanged.

  Brokers said the market benefited slightly from the poor sentiment in Japan after Tuesday's revelation that Daiwa Bank lost more than US$1 billion through secret trading by a bond dealer trying to cover losses he incurred 10 years ago.

  While there was only limited overseas interest in Hong Kong stocks, some switching from other regional exchanges was seen.

  The market already had discounted the possibility the Federal Open Market Committee (FOMC) would lower interest rates at its monthly meeting - which it failed to do on Tuesday night - and investors were hopeful a cut would be seen soon.

  'The market is in a cogitative mode right now. It's thinking about a lot of things and coming up with nice thoughts for some companies,' Kleinwort Benson head of sales Nial Gooding said.

  'We have blown away the cobwebs of pessimism. Nobody really cared about the FOMC meeting . . . but I think the market still believes the trend in interest rates is down. The only moot point is magnitude and timing.'   The market opened on a positive note following a solid showing by Hong Kong stocks in London, with the index rising 50 points by about 10.45 am, from Tuesday's close of 9,583.34.

  After a slight dip it began climbing again, closing for the morning up 60.26 points or 0.63 per cent, at 9,643.60.

  The afternoon saw a fall right from the start, with more than 30 points lost by 3.15 pm. It then began a strong climb, with the day's high reached just before the close.

  Banks had the best day, with the Hang Seng finance sub-index rising 80.82 points or 0.90 per cent to 9,100.75.

  Market leader HSBC Holdings rose $1 to $108 on turnover of $190.09 million.

  Hang Seng Bank was up 25 cents to $64.25 and Bank of East Asia was up 80 cents or 3.24 per cent to $25.50.

  Bank of East Asia was pushed up shortly before the close as rumours abounded about an issue of covered warrants on the stock, one broker said.

  Property counters also had a good day, with the Hang Seng sub-index rising 123.7 points or 0.74 per cent to 16,766.79.

  Cheung Kong, with turnover of $120.36 million, rose 70 cents to $42.10. It was boosted following its recent purchases of two property sites.

  Henderson Land rose 30 cents to $45.50, Sun Hung Kai Properties gained 25 cents to $62, and New World Development was up 35 cents at $30.20.

  Commercial and industrial counters closed in line with the market, with the Hang Seng sub-index up 50.88 points or 0.72 per cent at 7,099.8.

  Hutchison Whampoa was up 50 cents to $42.10 on the day's second highest turnover of $142.48 million.

  CITIC Pacific was up 20 cents to $23.15, but Wharf Holdings fell five cents to $24.25 and Cathay Pacific Airways lost five cents to close at $11.75.

  Utilities also made overall gains but underperformed the market, with the Hang Seng sub-index up 36.90 points or 0.35 per cent to 10,436.66.

  Hongkong Telecom rose five cents to $14.05, Hongkong & China Gas was up 15 cents to $12.50 and Hong Kong Electric climbed 10 cents to $26.05.

  Profit-taking hit second liners, with the Hang Seng MidCap 50 Index dropping 1.84 points or 0.15 per cent to close at 1,259.24.

  H shares had another good day, with the Hang Seng China Enterprises Index climbing 7.04 points or 0.77 per cent to 925.61.

  It was boosted mainly by Qingling Motors, which rose 19 cents to $1.85.

  Qingling was pushed up by investors optimistic its new car sales would be boosted because of the stabilising Japanese yen.

  Brokers said they expected the directionless, narrow-range trading to continue in the absence of new incentives until at least the end of the week.

'The key is, sentiment is not bad,' a broker said.



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Hang Seng Index

Blue chips lead index higher in light trade