The Hong Kong stock market managed to close at its highest level since February 1994 fuelled by a potent mix of rumours and optimism. The market opened higher following Wall Street's gains last Friday. The index raced towards the 11,700-point level, before reports that Cosco Pacific was about to place 250 million shares sparked profit-taking late in the session. The blue-chip Hang Seng Index ended at 11,622.13, up 29.77 points. The MidCap 50 Index also gained, but the Hang Seng China Enterprise Index fell almost 1 per cent. Brokers speculated that the Chinese Government's threatened crackdown on domestic investment in China's B-share market might have scared away some H-share investors. Turnover yesterday was $4.86 billion, down from a revised $5.14 billion on Friday. Allen Chang, sales director at PrimeEast Securities, said that without a rise in turnover the market would not be able to break too far above its present level. 'The market will need to see turnover above $6 billion if it is going to reach 12,000 points,' he said. In another sign of increasing caution, September futures contracts closed at a 17 point discount to the underlying cash market. Property and banking counters rose on optimism that US interest rates would not badly affect stocks. Henderson Land closed at a record high of $66.25, while Hysan Development and Sun Hung Kai Properties also made good gains. HSBC went to a record intra-day high of $143. Outside the index, Hong Kong Ferry made a 19 per cent jump to end at $14.30, on continuing rumours that the firm would redevelop its property holdings. A report in July by Merrill Lynch revalued the company based on the possible redevelopment of the Tai Kok Tsui Shipyard, prompting a resurgence in the stock. Howard Gorges, director at South China Brokerage said: 'It is at a very big discount to net asset value, so it is suddenly coming to life.' Another big mover was China oil company CNPC (Hong Kong), which added 7 per cent to 50 cents in heavy turnover on rumours of a possible share placement. 'They raised a little money a while ago, so they may have a shot of raising more at a higher price,' a trader said. On the losing side, Amoy Properties slid 1.65 per cent and Allied Properties lost 3.8 per cent after both posted disappointing results.