STOCKS closed mixed yesterday after profit-taking followed the widely anticipated cut in US interest rates. The decision by the US Federal Reserve to trim interest rates by 25 basis points was a signal for many local investors to lock in gains. Early losses were overturned in later trading as a continued strong inflow of overseas money helped the market finish in positive territory. Utilities boosted the index most, while many property and banking stocks fell. The Hang Seng Index closed 3.10 points up at 11,362.80, a gain of 0.02 per cent. Turnover was heavy at $7.44 billion, down from the revised $9.08 billion for Wednesday. Volume was healthy with 2.43 billion shares changing hands. Brokers said the ability of the index to finish in positive territory despite the expected profit-taking augured well for the market over the months ahead. Kleinwort Benson Securities Hong Kong sales head Nial Gooding said: 'It was the best of all possible results. 'We had the US interest rate cut and the Hong Kong Monetary Authority cut followed immediately.' The authority cut the liquidity adjustment facility by 25 basis points yesterday and the Hong Kong Association of Banks is seen as likely to cut its savings rate today. Brokers are looking for more interest rate cuts during the year to underpin further gains in the market. The index began the day weaker, falling from the previous close of 11,359.70 to 11,330 after a few minutes' trade. After recovering briefly it then slipped to the day's low of 11,278.70 at 11.25 am. The index closed for lunch at 11,323.11, an intra-day fall of 36.59 points. An inflow of funds in the afternoon helped boost the index to the day's high of 11,385.42 at 3 pm. Among the 33 Hang Seng Index constituents, 16 advanced, two closed unchanged and 15 lost value. Utilities led the way as they have trailed the market during the recent rally. The Hang Seng utilities sub-index added 86.83 points to 10,717.84. Cheerful Securities analyst Patrick Chia said: 'Utilities have been laggards. Now people are becoming more cautious they are buying utilities because they are supposed to be safer.' Hongkong and China Gas posted one of the biggest gains among Hang Seng stocks, rising 45 cents to $14.35 and Hongkong Telecom climbed 20 cents to $14.90. Many property and banking stocks succumbed to profit-taking. The Hang Seng finance sub-index lost 67.64 points to 10,715.85. HSBC led the market in net loss, falling $1 to $127 in the day's highest turnover of $609.07 million. Hang Seng Bank fell 25 cents to $74.50 and Bank of East Asia dropped 10 cents to $33. Many investors had bought banking stocks in anticipation of lower interest rates. Some of the second and third-line finance counters continued to rally, buoyed by this week's better than expected results from Ka Wah Bank. Financial services provider Guoco Group rose $2.20 to $44.80 and Wing Hang Bank climbed $1.60 to $29.85. Among major property stocks, Cheung Kong lost 75 cents to $56.75 and Henderson Land Development lost 25 cents to $58.50. Commercial and industrial stocks were mixed with media stocks providing the most interest. Television Broadcasts rebounded strongly, adding $1.40 to $29.20 after it had fallen 12 per cent over the previous five trading days. The stock has been unpopular recently over fears of falling advertising revenue and heavy selling from some of its major shareholders. Other media stocks were less fortunate. Oriental Press Group tumbled 30 cents or 8.88 per cent to $3.075 as the ongoing price war among the Chinese-language press again made investors wary of the stock. A number of smaller counters performed well as investor interest switched away from the blue chips. Construction and property company Kumagai Gumi added 50 cents or 7.46 per cent to $7.20 after news it had decided to list its infrastructure projects in the Yangpu industrial zone in Hainan. Chinese publishing software manufacturer Founder advanced strongly. The stock rose 37.5 cents or 13.15 per cent to $3.225. Brokers said foreign buyers were seeking out the stock. Looking ahead, brokers see the index set to make further gains but only after a period of consolidation. Mr Chia said there would be strong support at 11,200.
