STOCKS rallied strongly for a second day yesterday as investors snapped up key index stocks in anticipation of a strong opening to the Year of the Rat. Futures traders also were active in boosting the market with index futures surging on high volume. Property stocks led the way up amid continuing positive sentiment about a recovery in the territory property prices. The Hang Seng Index closed 107.35 points up at 11,471.81, a gain of 0.94 per cent. At one stage it had been 154.34 points up. Turnover was buoyant at $6.07 billion, up from the revised $4.71 billion for Wednesday. Volume was improved with 2.39 billion shares changing hands. Schroder Securities salesman Colin Sze said: 'These last two days we have seen a pre-New Year rally. People are waiting for Year of the Rat.' The market will be closed for three days next week and brokers see the market opening higher when trading starts again on Thursday. Many investors are picking up stocks now in advance of the expected rally. Brokers said there was plenty of arbitrage activity in the market as futures traders covered earlier positions by buying some of the major stocks. Crosby Securities salesman Miles Remington said: 'The market appears to have been pushed up on the back of futures trading.' The index opened sharply higher, climbing from the previous close of 11,364.46 to reach 11,480 after 30 minutes trading. After retreating slightly, it again went into high gear, reaching the day's high of 11,518.8 at noon. It then drifted lower to close for lunch at 11,493.38, an intra-day gain of 128.92 points. The afternoon saw choppy trading with the index falling at the close. Among the 33 Hang Seng Index stocks, 22 rose, seven closed unchanged, and four lost value. Property stocks led the market up with the Hang Seng property sub-index gaining 368.85 points to 20,859.36. Mr Sze said: 'The outlook for interest rates remains positive and the major developers are setting up for further expansion.' New World Development led all stocks in net gain, adding $1.80 to $38.20 on news it had signed $13 billion worth of deals to develop projects in Guangzhou. Cheerful Securities analyst Patrick Chia said: 'The fundamentals of the New World Group are good and the deals show they have good relations with the Guangzhou municipal government.' The counter also has lagged behind the other major property developers this year. New World Infrastructure, the infrastructure arm of the New World group, also advanced, closing a dollar or 6.55 per cent higher at $16.25. Among other property stocks, Henderson Land Development added $1 to $57.75, Cheung Kong rose 75 cents to $56, and Sun Hung Kai Properties gained 75 cents to $72. Conglomerates were higher with the Hang Seng commercial and industrial sub-index rising 75.33 points to 8,647.07. Swire Pacific led the sector for a second day, adding $1.50 to $70.50 after climbing $2.25 on Wednesday. Hutchison Whampoa was heavily traded but ended unchanged at $50 as investors remained cautious after its recent downgrading by Peregrine Investment Holdings. Peregrine changed its rating of the stock from a buy to a hold earlier this week. Media counter South China Morning Post (Holdings) lost five cents to $5.45 as investors mulled its takeover bid for television and property company TVE. TVE also lost five cents to $2.60. Utilities were pushed higher by buying of Hongkong Telecom. The Hang Seng utilities sub-index added 65.36 points to 11,287.51. Telecom rose 15 cents to $16.10 amid news another call warrant was being released on the stock. Barclays de Zoete Wedd Warrants issued 140 million American-style warrants at a strike price of $13.685. This is the fourth warrant issued on Telecom this month. H shares stood out among smaller stocks as the Hang Seng China Enterprises Index, which measures the 18 H shares, adding 14.63 points to 946.2. Yizheng Chemical Fibre was heavily traded, gaining 7.5 cents to $2.375 with 12.18 million shares traded. Looking ahead, brokers see the market mixed today but ready for further gains after holiday. Mr Chia said: 'The market is looking pretty good and should continue to go up as the inflow of foreign funds remains strong.'