HSBC and subsidiary Hang Seng Bank helped drive Hong Kong share prices higher yesterday in the wake of their better than expected interim results. The Hang Seng Index closed up 117.18 points, or 0.87 per cent, at 13,591.02 on slim turnover of $5.11 billion. The market has closed higher for four consecutive trading days. HSBC and Hang Seng Bank both revealed stronger earnings and lower than expected provisions for bad loans on Monday. The improvement has given a boost to other finance stocks. HSBC gained 2.64 per cent to $97, while Hang Seng Bank climbed 1.43 per cent to $88.25. 'The Hang Seng Index gained over 100 points but the gain was . . . all HSBC and Hang Seng [Bank],' Celestial Asia Securities research manager George Chan Lung-Cheung said. The banks' share price gains helped offset losses in mainland-related counters. Four relatively small lots of land sold by the Government yesterday also provided the thinly traded market some good news. Mr Chan foresaw low volumes over the next few weeks. 'People are on holidays and they are also waiting for interest rate guidance,' he said. The United States Federal Reserve will announce its stance on interest rates later this month, with global markets pricing in a rate increase. 'I think investors are just on the sidelines and there's no incentive to trade,' a source said. 'I'd say 13,800 [points] would be the highest level in the next few days.' Vickers Ballas head of research Andrew Fernow said the market was pleasantly surprised by HSBC's fundamentals. 'The HSBC results got the week off to a good start,' Mr Fernow said. 'The market was mostly driven [yesterday] by the finance counters and we saw subdued interest in the other sectors.' The sharper rise in the index in the afternoon was probably on the back of the results from the land auction, he said. 'I think there was a degree of comfort from the land auction . . . it didn't really influence the developers per se, but I think it created a more positive sentiment on the market,' Mr Fernow said. The Government sold one of the last luxury residential sites on the Peak for $134 million, beating market expectations in a range of $108 million to $132 million. Two sites in the New Territories sold in line with expectations, while a fourth site on Cheung Chau Island went below forecasts. 'I would say the auctions were a slight positive on the market,' DBS Securities institutional sales vice-president Geoff Galbraith said. On the downside, Tricom dived 25 per cent to $3.30 on profit-taking as new shares bought at a fraction of the current price begin trading tomorrow. Termbray Industries fell 4 per cent to $24 after reports the company would stop making printed circuit boards and concentrate on mainland property development. There was also continued rumours that China Shipping Development was looking to place shares (Stock Split, Page 12). Red chips had a bad day, with the index finishing down 2.59 per cent at 1,164.4 points as foreign investors remained nervous of the tensions between Beijing and Taipei. Pacific Challenge Securities said it expected the probable interest rate rise in the US would see the Hang Seng Index 'fluctuate around 13,500 points'.