The Hang Seng Index moved closer to its record high yesterday after China Mobile provided the benchmark with further upside at a time of heightened market confidence. The benchmark moved 248.62 points, or 1.41 per cent, up to 17,834.78 on reduced turnover of $11.83 billion. The index's record close was 18,301.69 points on March 28 this year. Activity was down yesterday compared with recent trading days but brokers saw it as a breather after last week's $15.88 billion average turnover. Analysts again attributed the strength to an overriding belief in a benign United States interest rate environment following last Friday's tame producer price index figures. Along with heavyweight China Mobile - which rose 3.76 per cent to $75.75 after a moderate performance last week - HSBC gained 1.8 per cent to $98.50, topping turnover with a trading value of $1.05 billion. Hutchison, which drove the market last week, came off slightly on profit taking, finishing down 0.84 per cent at $118. 'The United States is heading towards a soft landing scenario and because China is getting stronger, Hong Kong is benefitting on both fronts,' a Merrill Lynch research analyst said. Celestial Asia Securities research head Herbert Lau Chung-kwan said rumours of the imminent injection into China Mobile of new mainland assets were still buoying trade in the counter. 'Sentiment has been buoyant but I think people were speculating that China Mobile's share price will eventually reach a level whereby it can inject its seven mobile operations into the listed entity,' he said. The announcement last week that Li & Fung and Legend would be included in the Hang Seng Index gave their shares a boost yesterday. Li & Fung rose 2.11 per cent to $38.60 while Legend gained 5.16 per cent to $8.15. 'This time I think there was little surprise as everyone knew it was these two,' Mr Lau said. The blue chips were stronger but news flow in the broader market was thin and the Growth Enterprise Market saw little action. The GEM Index finished down 0.18 per cent. One broker said: 'It was kind of mixed. Tom.com and Sunevision are doing okay, but Henderson Cyber (the Net spin-off of Henderson Land) is struggling.' Henderson Cyber's stock ended the day unchanged at $1.23. Market watchers are betting on how long it will take for the Hang Seng Index to beat the record high reached at the peak of technology fever earlier this year. Kim Eng Securities research head Stephen Brown said at these levels, the index needed to move one way or the other pretty quickly to retain momentum. 'It can't stay at 17,880 for much longer. I think it's got quite a good feel to it,' he said. Celestial's Mr Lau said: 'I believe if everything goes well, the index could test historic levels of about 18,400.' Investors will also be waiting for consumer price index data due out in the US today.