bodyType

customContents

entityId

entityUuid

articlePageQuery

filter

article

articleBaseAdvertisingInfoArticle

articleListArticle

articleSeoArticle

helpersCheckIsPostiesArticle

hooksArticleAcknowledgementGateOverlayArticle

hooksTrackPageViewArticle

hooksContentInterestArticle

articleLinkingDataContent

articleSchemaContent

liveArticle

advertZone

sentiment

contentLock

topics

types

sections

moreOnThisArticles

urlAlias

commentCount

sponsorType

authorLocations

authors

paywallTypes

corrections

displaySlideShow

multimediaEmbed

printHeadline

seriesContainer

socialHeadline

headline

flag

firstTopic

glossary

flattenTypeIds

publishedDate

additionalInfoBoxes

images

image

relatedLinks

relatedNewsletters

__typename

createdDate

sponsor

factSheets

series

disableOffPlatformContent

published

updatedDate

summary

subHeadline

body

keywords

copyrighted

customTimezone

liveContents

SCMP Reporter

Blue chips headed higher yesterday but the gains might have just reflected games of hide and seek between cash and index futures markets, analysts said.

The Hang Seng Index rose 127.42 points, or 0.93 per cent, to 13,703.43 on a turnover of HK$10.09 billion. When the index looked on the verge of dropping below 13,000 last week, some institutional traders set up short positions in the market.

'Some of the players wanted to short squeeze these positions,' said Kenny Tang Sing-hing, an associate director at Tung Tai Securities.

Selected heavyweight names were pushed higher in the afternoon session, he said.

Cheung Kong rose 1.11 per cent to $91, while Sun Hung Kai Properties gained 0.65 per cent to $76.75.

In addition, 'there was some rotational buying in market laggard technology and blue-chip [stocks]', said Alex Tang Yee-yuk, head of research at Core Pacific-Yamaichi Securities.

Some of the buying might have been inspired by the way the Nasdaq Composite Index held up despite a profit warning from key technology name Hewlett-Packard, said Celestial Asia Securities research head Herbert Lau Chung-kwan.

Closing above resistance at 13,600 points was a positive sign for the market's prospects of getting above 14,000 points after weeks of rangebound trading.

'I think we are going to see a break out very soon, on the upside of course,' Mr Lau said.

Mainland-related stocks rebounded, with red chips rising 1.1 per cent and H shares climbing 1.09 per cent.

Some of the buying was on talk that red chips would be allowed to issue China depositary receipts so mainland investors could get exposure to them.

Oil prices got a chill from reports that stocks in the United States were well above expectations. New York July oil futures fell 1.84 per cent to US$27.72 per barrel on Wednesday.

That caused investors to switch out of upstream producers and into downstream petrochemical companies, Mr Lau said.

PetroChina lost 2.77 per cent to HK$1.75 while Jilin Chemical jumped 11 per cent to $1.21.

Century City and subsidiaries Regal Hotels and Paliburg were suspended yesterday pending an announcement that Regal was disposing of some of its hotels to help reduce the group's huge debt burden.

There were nine minutes of trade allowing quick-witted speculators to jump in on rumours the sale would realise a cool $10 billion, Mr Tang said. Regal leapt 38.46 per cent to 36 cents, Century City soared 21.95 per cent to 10 cents and Paliburg gained 18.65 per cent to 15.9 cents.

Cofco International, a listed unit of China's main food and drink distributor, rose 5 per cent to $2.10 before placing 120 million shares at $1.975 each. While the placement might cause a temporary setback, the cash-rich company trading on a historic multiple of 15 could reach $2.50 in the next six to 12 months, Mr Tang said.

'The market is speculating there might be some more assets injected into it. The parent holds stock in Coca-Cola China,' he said.

Key Figures

Close: 13,703.43 (+ 127.42)

Turnover: $10.09 bln

Volume: 11.33 bln shares

Day's high: 13,714.65

Day's low: 13,478.74

Advanced: 426

Declined: 265

Unchanged: 369

June futures: 13,776 (+ 153)

July futures: 13,807 (+ 158)



Rotational play brings buyers back to blue-chip and technology laggards