THE Hang Seng Index bounced back from a 70-point fall in the first few minutes of trade yesterday, ending 28.5 points higher on continuing hopes of a breakthrough in Sino-British relations.
The early morning dip was sparked by a switch in sentiment towards Hongkong Telecom in New York overnight.
It was fuelled by selling by investors who feared the gazetting of Governor Chris Patten's election proposals, which would be seen as a sign of a hardening in Sino-British relations.
But widespread speculation about the afternoon session in the Legislative Council switched the mood, as those believing they had hot inside information bought shares.
The index closed at 6,177.69 on turnover of $2.78 billion, $33 million down from Tuesday.
''The market went up a lot . . . I think some people already knew that the Hongkong Government was going to postpone the gazetting of Chris Patten's proposals,'' said the dealing manager of a leading brokerage.