HEAVY buying from overseas institutional investors yesterday pushed the Hang Seng Index to its sixth record in just over a month, with a 118.83 point gain to 7,124.12. HSBC Holdings padded the index by 21.6 points by jumping $1.50 to $72, while heavy interest from the US helped Hongkong Telecom add another 19.5 points with a 30 cents rise to $11.10. Turnover was $5.39 billion. Brokers said investors were enthused by weekend comments from Hongkong and Macau Affairs Office director Lu Ping that the Sino-British Joint Liaison Group would meet and that both sides were discussing an agenda. Crosby Securities institutional sales director Julian Wood said the market also responded to strong demand for Hongkong stocks in London on Friday. Although he expected the positive momentum to continue before this weekend's Sino-British political talks in Beijing, Mr Wood said the market was a bit overdone and the long-term outlook was worrying. He was particularly concerned about the direction of the Dow Jones Industrial Average during the next couple of months and US interest rates. ''Interest rates have bottomed out and if rates do rise that will have an immediate impact on rates in Hongkong, and that will have an effect on the attractiveness of the market here,'' he said. Mr Wood's views were shared by Sassoon Securities assistant general manager Michael Ng, who said there were too many questions about China's Most Favoured Nation trade status with the US. ''I still think the market needs some consolidation,'' he said. ''I think 6,900 is the support line.'' Mr Ng said the market was being fuelled by foreign funds that had changed their investment strategy. However, GK Goh Securities dealing director Bobby Ho said that if China's MFN status and Sino-British political differences were resolved, the Hang Seng could hit 8,000 points by year-end. After healthy profit-taking on Friday, the index jumped 105.76 points by 10.15 am to 7,111.05. After lunch the index set an intra-day record of 7,139 before sliding to 7,124.12 at the close. The utilities and property sectors were the most popular, as the sub-indices climbed 173.95 points to 8,101.59 and 175.06 to 11,572.94 respectively. Hongkong Electric had turnover of $166.1 million with the stock up 40 cents to $18.10. China Light gained 75 cents to $38.50 on turnover of $140.6 million. Hongkong Land, which has been wrapped in speculation that it might sell Exchange Tower III, was up 30 cents to $15.50. Speculative interest about Lei Shing Hong becoming a takeover target for Chinese investors, pushed the stock up $2, 14.2 per cent, to $16. The stock has climbed 122 per cent in the past two weeks. Melco International Development posted the largest jump with a 39.2 per cent, 9.3 cent, increase to 33 cents. It was also among the most heavily traded with volume of 58.5 million shares. Melco issued a statement saying it was unaware of any reasons for the increase. in the price and trading volume of its shares.
