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Suzanne Harrison

Bargain hunting and last-minute buying in index futures pulled Hong Kong stocks into positive territory yesterday, but trading was quiet with overseas markets closed for holidays.

 The Hang Seng Index finished 0.72 per cent firmer at 12,147.12 points.

 Turnover was $4.02 billion, the lowest since $3.29 billion was recorded on April 1 just before the recent rally.

 In mid-April, turnover reached $14.77 billion, with $8.12 billion the average for the past two months.

 Analysts said with Wall Street closed for the Memorial Day holiday, the early part of the week would be lacking in guidance.

 The London exchange was also closed yesterday.

  Nomura International head of sales John Lau said: 'It (the quiet trade) was expected given the overseas holidays.

 'The market is going to be externally driven . . . there's been a lack of momentum and market-moving news.'  In index futures, the June contract jumped 210 points to close at 12,220, although turnover in futures market was also thin yesterday.

 'Futures went up to a 70-point premium towards the close,' South China Research vice-chairman Howard Gorges said.

 He said buying in the market movers was 'bargain hunting on selective blue chips', but it was not aggressive buying.

 HSBC, Sun Hung Kai Properties (SHKP) and New World Development were among the gainers.

 HSBC closed 1.57 per cent stronger at $258, while SHKP rose 2.41 per cent to $63.50 and New World Development added 5.27 per cent to $19.95.

 New World's subsidiary New World Telephone said yesterday it was attempting to increase its share of the long-distance telephone market with price incentives.

 Losing ground was Cathay Pacific Airways, which shed 9.74 per cent to $10.65 in the wake of a pilot pay dispute which has affected hundreds of passengers.

 Cathay's parent, Swire Pacific, also weakened, closing with a loss of 3.24 per cent at $35.80.

 'It has been quiet,' Paribas Equity head of research Simon Irwin said.

 'We were doing $4 billion [in turnover] quite comfortably before lunch.

 'It's going to be a slow summer . . . until people can see tangible signs of recovery in Hong Kong.'  Nevertheless, some insiders said there was support for the index at the 12,000-point level.

 'It seems to have good support at 12,000,' Mr Lau said.

 Another broker said: 'I see the support level at 12,000 and the resistance level at 12,600.'  Mr Irwin was less bullish about the market, saying that over the next few months, his company would be a buyer around the 11,000 level.

 'The market has done its correction and some of the excesses have come out and I still think that most of the risks are on the downside,' he said.



Futures fuel late gains