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Stephen Seawright

The Hang Seng Index gained slightly yesterday as China Telecom counteracted losses in HSBC and Cable & Wireless HKT while red-chip technology stocks soared.

 The blue-chip index rose 93.22 points, or 0.55 per cent, to 16,936.81 on a turnover of $16.34 billion.

 Heavyweight China Telecom rebounded 4.28 per cent to close at $73 - after it fell 2.09 per cent on Wednesday - which supported the Hang Seng Index when most other large blue chips declined.

 The gains in the mainland-based telecommunications giant outweighed falls in HSBC.

 The bank dropped 1.4 per cent to $88 after Singapore Telecommunications said it was seeking legal advice over HSBC's alleged conflict of interest during the takeover battle for HKT.

 HSBC subsidiary Hang Seng Bank shed 2.13 per cent to $68.75 after SingTel's announcement on Wednesday.

 However, brokers said the market was not too worried by the possibility of legal action as HSBC would be expected to win any contest.

 HKT eased 2.19 per cent to $22.25 after the strong rally before its merger with Pacific Century CyberWorks this week. The stock dived 12.33 per cent on Wednesday.

 CyberWorks rose 1.47 per cent to $20.70, reducing Wednesday's 7.9 per cent loss.

 'As the market sentiment remains cautious the two shares will come under some selling pressure in the short term,' KGI Asia Securities associate director Ben Kwong Man-bun said.

 SmarTone Telecommunications was the biggest gainer among the blue chips, soaring 6.73 per cent to $31.70.

 Brokers said that was due to expectations of a higher listing price for rival cellular operator Sunday.

 The red-chip index soared 8.77 per cent on the back of gains in technology-related shares led by personal computer manufacturer Legend, which leapt 28.04 per cent to close at $45.20.

 The counter rallied after the announcement of a strategic alliance with CyberWorks to develop broadband Internet services in the mainland.

 A one-into-four stock split on March 8 also attracted interest to the counter as it will make the stock more affordable to smaller investors.

 'People were scrambling for [Legend's] shares and it pulled up other hi-tech stocks,' Fulbright Securities general manager Francis Lun said.

 'The stock is not cheap but it is one of the rare plays as it has Internet and [personal computer] manufacturing businesses,' Asia Financial Securities research head James So said.

 Strong gains were also made by software developer Founder, which jumped 18.18 per cent to $7.15, while Stone Electronic rose 14.81 per cent to $3.875.

 Hong Kong Toy Centre soared 337.24 per cent to $1.08 as the stock resumed trading after the company announced a change of ownership.

 Brokers said they expected the market to continue to move higher as HSBC was considered undervalued.

 Mr Lun supported the theory, expecting HSBC to push the Hang Seng Index above the 17,000-point level.



Red-chip technology issues steal shine while HSBC and HKT stumble