Hong Kong investors appeared fearless yesterday, pushing the Hang Seng Index to a record closing high despite the possibility of a US interest rate increase. China Everbright Securities head of research Patrick Chia said: 'People are willing to gamble that rates will remain unchanged. They will be burned if they do rise.' Optimism over China provided most of the momentum, while bullishness on the property market also played its part. The Hang Seng Index closed at 14,236.2, up 127.38 points, or 0.9 per cent. Turnover was $12.75 billion, compared with $11.56 billion on Monday. After a lacklustre morning, the index shot higher after lunch. Guangdong Investment, the trading arm of the Guangdong provincial government, rose 6.66 per cent to $8. Citic Pacific also ended higher. HSBC closed higher after a correction on Monday and Henderson Land also had a good day. The real excitement was among red-chip stocks of mainland-controlled firms listed and incorporated in Hong Kong. Shares of Beijing Enterprises are said to be trading at more than $36 on the grey market, compared with its issue price of $12.48. Brokers said buying sentiment had spilled over to other red chips. China Merchants Hai Hong, Shanghai Industrial and Cosmos Machinery were strongest. Better than expected mainland inflation data also boosted red chips, increasing the likelihood that Beijing would ease interest rates. Among smaller companies, household electronics maker Hualing gained more than 13 per cent to $1.27, despite posting a loss of $78 million for the year to December. Television maker Luks Industrial rose more than 3 per cent to 96 cents a day after announcing a $244 million loss in the same period. Having made such a strong advance, brokers said they expected the index to correct in the event of a US rate rise. BZW Asia salesman Archie Hart said that following the 25-basis point rise in March, the index climbed for a couple of days before falling sharply. 'It is a little like the cartoon character who walked off the side of the cliff and didn't realise he was walking on air until it was too late,' Mr Hart said.