REACTION to higher prices in London and an enthusiastic response to rumours helped the Hang Seng Index gain another 79.34 points yesterday to 7,339.08. Turnover was $4.69 billion as investors chased blue-chip and second-line counters. However, brokers said there were growing indications that the rally could be short-lived. The most significant was that June index futures fell 32 points to close at a 15-point discount to the cash market. ''The futures have put a note of caution in the market,'' said Barclays de Zoete Wedd derivatives trader Alistair Nicholson. Jardine Fleming director W.K. Wan said he was concerned because interest in the utilities sector had picked up. ''It's not a good sign when this happens late in the rally,'' he said. ''Utilities are defensive investments which tend to be a reflection of maintaining exposure but reducing risk.'' China Light and Power rose 75 cents to $40.25, Hongkong Electric 20 cents to $18.10 and Hongkong Telecom 30 cents to $11.30. The utilities sub-index jumped 154.45 points to 8,295.46. Mr Wan said the market correction, when the index lost more than 300 points after hitting a record of 7,447.24, was too shallow for a surge to a new high to take place. For this to materialise, he said there would have to be a dramatic corporate development such as a takeover or land sales to sustain bullish sentiment. Rumours played a significant role again, the hottest being the takeover of Miramar Hotel by Cheung Kong and CITIC Hongkong. Trading in Miramar was suspended at 10 am. Hongkong Land continued to be plagued by speculation it had sold Exchange Square III despite denials by senior officials on Tuesday. The stock was the most heavily-traded with turnover of $196.8 million and rose 20 cents to $17. Investor optimism about an oil find by Husky Oil helped Hutchison Whampoa gain 40 cents to $22.20. The discovery, announced on May 25 by its joint venture partner, Total Canada Oil & Gas, took place in Alberta but the reservoir size has yet to be determined. Total's stock has jumped 16.8 per cent since the discovery was disclosed. Barclays de Zoete Wedd director K.S. Ng said rising oil prices had seen the value of Hutchison's Cavendish division jump to $8.5 billion from $6.5 billion a year ago. Jardine Matheson was the second most-heavily traded with turnover of $149.2 million on rumours of a covered warrant issue, later confirmed by Peregrine. The stock climbed $1 to $62. Among the second-line stocks to attract attention HKR International, which holds a large land bank on Lantau Island, was up 10 cents to $5.15. Brokers said a 24 million share block at $4.80 each was sold by a Taiwanese investor and this would remove the counter's price resistance. Public International and Ong Holdings, which are both partly owned by Shanghai International Securities, posted large gains on speculation about rights issues. Public International jumped 22.7 per cent or 77.5 cents to $4.175 while Ong Holdings climbed 18.5 per cent or 32.5 cents to $2.075. Ocean Information rose 13 cents to $1.86 on reports it had been awarded a large contract by a German firm. The stock is still trading below last year's issue price of $2. Dinosaur fever fell victim to profit-taking as Harbour Ring lost 15 cents or 12.2 per cent to $1.07 while Herald Holdings dipped 6.7 per cent or 15 cents to $2.075. Brokers said investors realised it was still difficult to determine the profits both stock would reap from supply contracts for toys related to the movie Jurassic Park. However, they expect Harbour Ring and Herald to rally again when the movie opens next week in Hongkong. Golden Hill, rumoured to be a takeover target of mainland enterprises, posted the largest loss, tumbling 19.4 per cent or 14 cents to 58 cents.