The Hang Seng Index gained 0.7 per cent yesterday as HSBC broke out of the shackles of a takeover deal to play catch-up. The index rose 120.99 points to 17,359.66, with HSBC accounting for 12.84 per cent of the healthy HK$15.02 billion turnover as it rose 3.59 per cent to $93.75. 'I think HSBC has been left behind for some time by the market,' Tung Tai Securities associate director Kenny Tang Sing-hing said. HSBC's price has been stalled by traders arbitraging between it and takeover target Credit Commercial de France (CCF). The arbitraging should end today when CCF shareholders make their choice between cash and share offers from HSBC. Mr Tang said HSBC could reach $97 within two weeks, helped by expectations it would report a 20 per cent rise in interim net profits at the month's end on strong Asian operations. Some of the buying was traders covering heavy short positions on HSBC, a source at a European house said. The shorts had been put on because it was anticipated that more CCF shareholders would go for cash than shares, muddying HSBC's balance sheet. The bank was rumoured to be countering that by buying its own shares to make them look more attractive to CCF shareholders, the source said. Property counters jumped as investors sought stocks left behind in the upswing. 'There's a lot of room for re-rating given that they have underperformed the market for the last two years,' BNP Prime Peregrine research head Adrian Ngan Wai-hung said. 'A lot of these property stocks are under-owned.' The heavy volumes of the last two days led commentators to believe foreign buyers were back in force. But Pacific Challenge Securities research director Alan Hutcheson said some of it might not be new money, just a re-allocation from Japan to Hong Kong within Pacific portfolios. 'Japan is talking about an interest rate [rise] and most people think that is too premature,' Mr Hutcheson said. The red-chip index jumped 5.29 per cent, while H shares rose a subdued 0.66 per cent. The difference could be explained by the higher market caps of red chips which made them more attractive for foreign investors buying large blocks, Mr Hutcheson said. Hutchison was unmoved at HK$110.50 despite reports Deutsche Telekom was making a US$30 billion bid for US mobile operator VoiceStream, in which Hutchison holds 19 per cent. Nomura International telecommunications analyst Richard Ferguson said Deutsche Telekom had a poor track record of pulling off big deals. NTT DoCoMo was also interested in VoiceStream and was expected to announce an alliance with Hutchison and the Netherlands' KPN on mobile operations in Europe today. 'NTT DoCoMo might be the preferred partner,' Mr Ferguson said. Multifield, a Hong Kong-owned firm with interests in Shanghai property, jumped 37.73 per cent to 73 cents as rumours of a tie-up with a foreign software company in a technology venture sparked speculative buying. The Growth Enterprise Market Index fell 9.71 points, or 2.16 per cent, to a record low of 438.39 points. The market's young technology firms were battered by reports that Next Media was axing 100 jobs at its Internet operations to cut costs. Next Media fell 4.95 per cent to HK$1.15.