WITH the second round of the Sino-British talks starting today, investors yesterday capitalised on the market's recent robust performance to take profits, reversing an early rally to send the Hang Seng Index down 8.87 points to 6,836.88.
However, there weremixed signals. The index reached an intra-day high of 6,899.85 shortly after the opening bell but closed at a 26.88-point premium to the May index future contract.
Kleinwort Benson Securities salesman Tony Edwards said the market was still bullish with 7,000 points the first resistance level but investors were nervous about the Sino-British discussions in Beijing about Hongkong's political reforms.
After the talks tomorrow, Mr Edwards said, the market should go through a cooling down period with political rhetoric less of a factor.
Dao Heng Securities research director Alex Tang said the index had jumped 38 per cent over the past four months.
He said the profit-taking now taking placing was not surprising because the index was 16 per cent above the 20-day moving average.
