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SCMP Reporter

Hong Kong stocks moved back into positive territory yesterday, after two days of declines, helped by bargain hunting and signs of stability among regional currencies.

 Brokers said the futures market provided the impetus for the rise, as the futures contracts remained at a premium to the cash market throughout the day.

 Turnover shrank, as many investors preferred to remain sidelined to see whether the recently found regional stability was really here to stay.

 The Hang Seng Index closed 139.52 points, or 1.35 per cent, higher at 10,442.13.

 The rally came after the index had fallen 275.99 points over the previous two days.

 Turnover dropped to $6.99 billion from Wednesday's $11.11 billion.

 BNP PrimeEast Securities sales director Allen Chang said: 'The regional currencies are moving the right way and traders like what they see in the Japanese yen. It is all beginning to look positive.'  Brokers said the strengthening currencies had bolstered confidence that the worst of the Asian financial turmoil might now be over.

 Many market players remain unconvinced, accounting for the low turnover.

 Dharmala Securities research director Ben Kwong Man-bun said: 'Investors are still worried about signs of weakness in Hong Kong's economy and stability of Asian currencies.

 'That is keeping them on the sidelines.'  The futures market paved the way for the rally, as both the February and March futures contracts traded at a consistent premium to the cash market over the day.

 The February contract closed at a 117.87-point premium to the Hang Seng Index, and the March contract at a 132.87-point premium.

 Brokers said the US Federal Reserve's decision overnight to leave US interest rates unchanged had little impact on the market.

 Among the 33 Hang Seng Index constituents, 21 advanced, one closed unchanged and 11 lost value.

 Mainland-related stocks and property counters ended the day with the best gains, after banks and conglomerates had made the early running.

 Cheung Kong Infrastructure led all blue chips in percentage gain, surging 10.1 per cent to $22.70, with investors attracted to its defensive earnings stream.

 Amoy Properties was the best of the property stocks, rising 4 per cent to $6.35.

 Outside the main index, red chips continued to outperform with the Hang Seng red-chip index climbing 3 per cent to 1,466.85.

 Brokers said the Hang Seng Index would probably remain trapped between 10,000 and 11,000 over the next few weeks, as it underwent a consolidation phase.

KEY FIGURES Close: 10,442.13 (+ 139.52) Turnover: $6.99 bln Volume: 4.17 bln shares Day's high: 10,508.15 Day's low: 10,192.18 Advanced: 436 Declined: 193 Unchanged: 521 Feb futures: 10,560 (+ 210) Mar futures: 10,575 (+ 210) 



Futures lead index upwards