Hong Kong stocks resumed their uptrend yesterday with investors seeking out red chips and banking counters. The launch of a basket of red-chip warrants on Wednesday and talk of a possible interest rate cut in China fuelled a run on red chips and most rose in strong turnover. Key banking stocks continued to climb in the wake of Monday's impressive interim results at HSBC and Hang Seng Bank. The Hang Seng Index closed 36.82 points up at 11,164.36 after spending the day in a narrow 42.79-point range. Turnover fell to $4.62 billion from Wednesday's revised $5.49 billion. The futures were less exciting, with the August contract dropping three points to 11,145 and the September contract unchanged at 11,180. China Everbright Securities research director Patrick Chia said: 'The red chips were in the limelight. They not only made gains but they did so in heavy volume.' Interest in Hong Kong-listed China stocks was stoked after W.I. Carr Indosuez launched a basket warrant on Wednesday naming five of the red-chip counters. The basket warrant covered China Resources, China Overseas, Guangzhou Investments, Ng Fung Hong, and Shanghai Industrial. Guangzhou Investments powered 4.7 per cent to $2.225, Ng Fung Hong rose 7.5 cents to $3.775, and China Resources added five cents to $6.80. Shanghai Industrial climbed 65 cents to $13.95, taking the conglomerate's gain to 91 per cent since it listed at the end of May. Even red chips not covered by the warrant made up ground, helped by talk of a possible interest rate cut in China sometime next month. Hang Seng Index constituent Citic Pacific rose 30 cents to $34, and Cosco Pacific added 25 cents to $5.90. Among the 33 Hang Seng Index constituents, 19 advanced, four closed unchanged, and 10 lost value. Banking stocks led the index higher, with the Hang Seng finance sub-index adding 0.96 per cent to 11,342.36. The surge in the banks was initiated by Monday's announcement of bumper 34 per cent growth in pre-tax profit at HSBC. Dharmala Securities research director Ben Kwong said: 'People are attracted to banking counters after the results on Monday were so encouraging. 'We are seeing an upward re-rating of profit forecasts.' HSBC rose $1.50 to $133.50, Hang Seng Bank added 25 cents to $79.75, and Bank of East Asia climbed 60 cents to $29.70. Bank of East Asia reports its results on Tuesday and was boosted by expectations it too would see good profit growth. Conglomerate Swire Pacific dropped after its results announced yesterday were at the lower end of expectations. Swire led all stocks in net loss, losing 50 cents to $67, and subsidiary Cathay Pacific Airways dropped 25 cents to $12.85. Brokers saw the market as likely to consolidate in the near term as it awaited a further push to break through the 11,200 barrier. Mr Kwong said: 'It needs a further inflow of foreign funds to stage a sustained climb above the 11,200 level.'