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SCMP Reporter

Hong Kong shares recovered some of Monday's losses yesterday, finishing 0.83 per cent higher amid hopes that interest rates may be cut.

 The Hang Seng Index climbed 81.89 points to 9,891.06, off its intraday high of 9,939.97.

 Mainland-related counters were generally weaker.

 Turnover, at $2.56 billion, was higher than Monday's $2.21 billion, but still well shy of the $8.86 billion daily average in January last year.

 'It's pretty dull and boring, but there are pockets of buying interest out there,' DBS Securities institutional sales vice-president Geoff Galbraith said.

 Brokers said interest from Japanese pension funds provided a welcome source of liquidity.

 BNP Prime Peregrine Securities head of Hong Kong research Adrian Ngan Wai-hung said interest rates were expected to be reduced by 25 basis points in the next few weeks.

 'Interest rates will dominate the market in the next couple of weeks,' he said.

 HSBC climbed 0.26 per cent to $188.50 after dropping on Monday.

 Subsidiary Hang Seng Bank ended the day 1.1 per cent higher at $68.50.

 'People are not willing to sell, so when there are buying orders the market will go up easily,' Mr Ngan said.

 China Telecom helped to lead the market higher by gaining 4.58 per cent to $13.70.

 Brokers said buyers were taking advantage of the counter's slide over the past month. It has shed 8.97 per cent since December 9.

 First Pacific rose 10.32 per cent to $4.275, as shares in Metro Pacific, the conglomerate's Philippine trading arm, posted gains on speculation of headway on its Fort Bonifacio redevelopment.

 Shares in currency-sensitive Cathay Pacific Airways jumped 7.89 per cent to $8.20 as regional currencies continued to firm.

 Property counters lost more ground following the weekend's disappointing sales. Cheung Kong ended 0.91 per cent lower at $54.25.

 Red chips and H shares finished marginally weaker.

 The red-chip index closed 0.49 per cent down at 887.39 points, while the H-share index eased 1.26 per cent to 382.98 points.

 Brokers said there was talk in the market that ING Barings was set to introduce a share placement for a mainland-related company. There were also rumours that Swire Pacific, Henderson Land Development and Sun Hung Kai Properties were in the process of arranging new syndicated loans.

 After hefty falls on Monday, the index futures market also closed stronger.

 The January contract rose 115 points to finish at 9,885 points, roughly in line with the cash market.

  The February contract settled with gains of 125 points at 9,915.



HSI climbs on rate-cut hopes