bodyType

customContents

entityId

entityUuid

articlePageQuery

filter

article

articleBaseAdvertisingInfoArticle

articleListArticle

articleSeoArticle

hooksArticleAcknowledgementGateOverlayArticle

hooksTrackPageViewArticle

hooksContentInterestArticle

articleLinkingDataContent

hooksAmpRedirectArticle

articleSchemaContent

liveArticle

advertZone

sentiment

contentLock

topics

types

sections

paywallTypes

createdDate

publishedDate

sponsorType

urlAlias

moreOnThisArticles

commentCount

authorLocations

authors

corrections

displaySlideShow

multimediaEmbed

printHeadline

seriesContainer

articleSpeeches

socialHeadline

headline

images

flag

firstTopic

glossary

flattenTypeIds

image

relatedLinks

relatedNewsletters

__typename

sponsor

pdfFiles

seriesReverseOrder

series

disableOffPlatformContent

published

updatedDate

summary

subHeadline

body

keywords

readingTime

customTimezone

liveContents

The Hong Kong share market surged 3 per cent yesterday as concerns eased over interest rates while Li Ka-shing's flagship companies gained on the possible sale of Hutchison Whampoa's Orange mobile telephone network.

 The Hang Seng Index rose 364.43 points to close at 12,498.56 on a turnover of $7.03 billion.

 The United States consumer price index for last month, reported on Tuesday, was in line with expectations, taking the Dow Jones Industrial Average to a higher close.

 'The interest rate worry has lessened a little,' KGI Asia associate director Ben Kwong Man-bun said.

 He rated the chances of an interest rate rise when the US Federal Reserve meets next month as '50:50'.

 Cheung Kong jumped 9.12 per cent to close at $65.75 - its biggest one-day gain this year.

 The jump was caused by its 49.97 per cent stake in Hutchison, which rose 6.29 per cent to $76 on the news of talks with Germany's Mannesmann on the sale of British mobile network Orange.

 Trade on the two stocks was valued $1.35 billion, or 19.2 per cent of yesterday's market turnover.

 Brokers said Cheung Kong rose by a greater amount because property counters had recently been oversold, partly on fears of further interest rate increases.

 DBS Securities research head Frederick Tsang Sui-cheong said: 'A lot of property stocks got oversold and that is why we saw a rebound.'  Short squeezing set in after the market's strong opening.

 Mansion House Securities research head Stanley Ng Wing-chark said: 'When people start buying, other people have to start covering their short positions.'  HSBC rose 3.6 per cent to $86.25 as brokers sought the stock as a bargain after last week's downturn.

 'It's grossly oversold - quite a lot of the selling of HSBC was related to the concern over the Republic New York acquisition which I don't think is a problem,' Mr Ng said.

 China Telecom was one of the few blue chips to show a decline yesterday, closing down 0.62 per cent at $24, a loss brokers ascribed to its upcoming share placement as part of a global fund-raising exercise.

 Tai Fook Securities deputy managing director Lennon Chan Wing-luk said: 'Its heavy placement is going to be done within a very short time.'  Fund managers said China Telecom tested the market at around $20 to $22 for its US$1.65 billion share placement.

 Daiwa SB Investment chief investment officer Ambrose Chang said: 'I will take up some China Telecom shares because the mainland's mobile phone market still has strong growth potential - but I want to see a bigger discount of, say, 10 to 15 per cent.'  Most mainland-related counters advanced yesterday, with the H-share index rising 2.74 per cent to 484.61 points and the red-chip index gaining 2.42 per cent to 938.42 points.

 China Travel led gains among the red chips, rising 11.11 per cent to $1.10 amid speculation the company would sign contracts related to the Disney theme park on Lantau Island if the project went ahead.

 Brokers did not expect yesterday's rally to continue but said everyone would be looking at Wall Street for direction.

 BNP Prime Peregrine director of sales Jason Ho Ka-keung said 12,500 was a 'fairly big resistance level - I don't think the market has any momentum to test any higher'.



Cheung Kong and Hutchison lead gains amid Orange sale talk