Hong Kong stocks rallied for a second day yesterday as bargain hunters boosted the market following the heavy sell-off earlier this week.
Traders said the receding threat of inflation and conciliatory messages from China about Taiwan helped improve sentiment.
The Hang Seng Index closed 105.83 points higher at 10,557.58, a gain of 1.01 per cent. At one stage it had been 196.8 points up. Turnover was healthy at $5.20 billion, up from the revised $4.43 billion for Thursday.
In London, the Hang Seng London Reference Index closed down 71.05 at 10,486.53.
Andrew Mathers, director at Deutsche Morgan Grenfell, said: 'The market was up towards the end of the week following the overselling earlier.
'There had been an overreaction to the uncertainty on Wall Street.' Much of the week's losses were caused by the big jump in US non-farm payrolls during February, which suggested interest rates might have bottomed, traders said.
Thursday's US producer price figures made some investors reconsider. The 0.2 per cent fall in the index meant the Federal Reserve might yet be able to cut interest rates over the next few months, they said.
