Investors once again turned to mainland-related shares for safe havens as interest rate sensitive counters led blue chips down 1.01 per cent yesterday. The Hang Seng Index shed 166.91 points to 16,267.47 after Wall Street's decline on Friday had investors rethinking the interest rate outlook. Developers were particularly hard hit on profit-taking following a run-up last week ahead of a successful land auction and government action to assist the sector. H shares and red chips bounced 1.88 and 2.2 per cent higher respectively amid relatively active turnover. The sectors have soared in the past few months as the mainland's closed capital account offers a haven from rising United States interest rates. 'The market focus is shifting into China-related plays, especially H shares. Turnover has picked up especially since the macro [gross domestic product] figures in May,' said BNP Prime Peregrine sales director Samson Chau. Besides strong first-quarter GDP figures, the mainland has recently released data showing exports are rising, consumer prices are turning positive and electricity output is on the rise. The latest good news came as Beijing announced that foreign direct investments (FDI) in the first five months of this year grew 25.2 per cent compared with the same period last year. Bank of America said the FDI data showed interest in the country ahead of its expected entry into the World Trade Organisation. 'This suggests the country's economy will indeed get a boost after it joins the WTO,' said an analyst at the bank, adding that the inflows would allow Beijing to continue to experiment with liberalising the trading band on its currency. Yesterday's biggest H-share gainer was Huaneng Power, which soared 11.45 per cent to $2.675. The counter offers an example of the more active trading environment for the sector. Its average daily volume in the year to date is 17.05 million shares - compared with last year's pitiful average of 894,000 shares over the same period. 'The feedback from the brokers has been that there has been increased interest in H shares particularly on the institutional side but for retail investors as well,' said ING Baring head of China research Graham Ormerod. Mr Ormerod said he thought the country's micro-picture was as compelling as the broader economic trends. 'The companies themselves are doing an awful lot better operationally,' he said, pointing to such sectors as expressway operators and power companies. Indeed the only major surprise on the downside in earnings came with software, computer and electronic publishing group Founder, which had been one of the darling red chips trading on a technology theme. 'That kind of marred an otherwise quite exceptional final earnings reporting season for China shares,' Mr Ormerod said. The fallout in technology stocks, including market dominator Legend, has kept red-chip gains to 19.54 per cent over the past three months, compared to 39.67 per cent for H shares. The Hang Seng Index fell 5.61 per cent over the same period.