bodyType

customContents

entityId

entityUuid

articlePageQuery

filter

article

articleBaseAdvertisingInfoArticle

articleListArticle

articleSeoArticle

helpersCheckIsPostiesArticle

hooksArticleAcknowledgementGateOverlayArticle

hooksTrackPageViewArticle

hooksContentInterestArticle

articleLinkingDataContent

hooksAmpRedirectArticle

articleSchemaContent

liveArticle

advertZone

sentiment

contentLock

topics

types

sections

moreOnThisArticles

urlAlias

commentCount

authorLocations

authors

paywallTypes

corrections

sponsorType

displaySlideShow

multimediaEmbed

printHeadline

seriesContainer

socialHeadline

headline

flag

firstTopic

glossary

flattenTypeIds

publishedDate

additionalInfoBoxes

images

image

relatedLinks

relatedNewsletters

__typename

createdDate

sponsor

pdfFiles

seriesReverseOrder

series

disableOffPlatformContent

published

updatedDate

summary

subHeadline

body

keywords

readingTime

customTimezone

liveContents

SCMP Reporter

STOCKS closed sharply higher yesterday after speculation on interest rate cuts and expiry of January index futures led to volatile trading.

  The uncertainty caused falls early in the day as profit-takers dragged the market down by almost 50 points.

  Properties and banks led the rebound, which saw the market regain about 200 points.

  The Hang Seng Index closed up 142.49 points or 1.28 per cent at 11,210.46.

  Turnover was buoyant at $6.52 billion, compared with Monday's $5.09 billion. Volume improved to 3.15 billion shares.

  Kent Rossiter, institutional sales manager at Sun Hung Kai Securities, said: 'The banking and property counters came back strongly in late trading.

  'That is an indication about people's views towards the interest rate cut.'   The US Federal Open Market Committee (FOMC) began its meeting yesterday to decide whether interest rates should be trimmed further.

  The market remained mixed about whether rates would be cut but optimism was growing.

  Lower interest rates will help boost stocks, particularly interest rate-sensitive bank and property issues.

  Wall Street advanced on Monday amid positive sentiment the Fed would cut interest rates this month and again later in the year. The Dow Jones industrial average added 33.23 points to 5,304.98.

  The expiry of the January index futures also created volatility yesterday as derivatives traders sought to influence the level of the cash market.

  The January contract closed 75 points higher at 11,110.

  Stocks began trading on a weaker note, with the Hang Seng Index dropping from the previous close of 11,058.97 to reach the day's low of 11,013.55 after a few minutes.

  Seesaw trading throughout the morning session saw the index stop for lunch at 11,101.21 to show an intra-day loss of 42.24 points.

  The index opened sharply up in the afternoon as buying and volumes increased.

  It closed just off the day's high of 11,213.41 - the highest since February 1994.

  Among the 33 index constituents, 27 advanced, one closed unchanged and five lost value.

  Property stocks boosted the index the most with the Hang Seng property sub-index climbing 421.02 points to 20,772.43.

  Abbott Lau, salesman at Schroder Securities, said sentiment was being driven by property sales.

  Long queues were seen at residential property sales at the weekend and property developers had been very strong.

  Sun Hung Kai Properties led blue chips in net gains, climbing $2.25 or 3.21 per cent to $72.25 as investors continued to view as positive its plans for huge housing projects in the New Territories.

  Among other developers, Henderson Land Development added $1.50 to $57.50 and New World Development rose 70 cents to $37.70.

  Banking stocks advanced to lift the Hang Seng finance sub-index 112.62 points to 10,636.13.

  Bank of East Asia stood out, gaining $1.40 to $32.80 amid news another warrant was being offered on the stock, the second in as many days.

  Confirmation of an American call warrant by Credit Lyonnais was released after the market closed. A total of 150 million warrants were issued with an exercise price of $32.80.

  Utilities had a much better day as investors returned to the heavily lagging sector. The Hang Seng utilities sub-index gained 103.06 points to 10,543.15.

  All four blue-chip utilities advanced. Hongkong Electric led with a 45-cent gain to $26.30 while Hong Kong and China Gas added 30 cents to $13.85.

 Elsewhere, Cathay Pacific Airways climbed 50 cents to $14.15 following news its flights in the first 11 months of last year were 71.4 per cent full.

  Second and third liners saw a fair share of the action as investors picked up some of the counters that had lagged the rally.

  Smaller banks were among the strongest as they benefited from follow-through buying after the better-than-expected results from Ka Wah Bank on Monday.

  Mr Lau said: 'Investors are looking for better results across the banking sector. The expectation is that other banks will have a good season.'   Ka Wah put on 15 cents to $2.75, Wing Lung Bank rose 60 to $49.30 and Dao Heng Bank added 30 to $32.40.

   Brokers said the market's next move would depend on whether interest rates were cut at the FOMC meeting.



Index gains 1.2pc after wild swings in trading