A COMBINATION of disappointing interim results, rumours and the expiry of the July index futures contract provided the market with a spark yesterday. The Hang Seng Index, however, dipped 3.28 points to 6,899.93 as renewed interest by Hongkong investors was offset by strong selling by foreign institutions. Turnover was $3.06 billion with HSBC Holdings and Hang Seng Bank accounting for 21.4 per cent or $657 million. Brokers said the keen interest in the two stocks was due to continued speculation that HSBC could sell 10 per cent of Hang Seng to a mainland-controlled company, with Shougang International the most recent suitor mentioned. Nomura International vice-president Gary Wong said switching was another factor as investors moved into HSBC and backed out of Bank of East Asia, which yesterday released interim results below market expectations. He said HSBC's interim results would be released on August 31 and they were expected to be quite strong. HSBC climbed $1 to $74 while Hang Seng gained 50 cents to $58.50. However, Lehman Brothers head of research Kirk Sweeney said his firm had a sell recommendation on HSBC because it expected results would decline during the second half of the year. ''To a large extent, we have seen a cyclical peak in the profits among banks in Hongkong,'' he said, adding that the sector would be hurt by a slowdown in mortgage loans and trade finance. Bank of East Asia dropped $1 to $34.25 after it said profits had climbed 21.8 per cent to $198.2 million while the market expected growth of 25 to 30 per cent. Brokers said Bank of East Asia might be managing its profits to prepare for weaker second-half results. The results took the steam out of a morning rally, which saw the index hit an intra-day high of 6,939.28 before surrendering all of the gains in the afternoon. Guoco Group climbed a further 60 cents to $23.6 on the heels of its $4.8 billion purchase of Overseas Trust Bank. Mr Wong said Nomura International regarded Dao Heng's convertible preferred shares as a better investment than Guoco shares because Guoco would not benefit from the OTB acquisition. ''People who missed out on buying the convertible preferred shares have returned to buy Guoco shares,'' he said. There was strong support for Hutchison Whampoa, which climbed 10 cents to $20.70 on turnover of $223.1 million. Hongkong Telecom was also heavily traded with turnover of $140 million. The stock was unchanged at $10.70. China Light and Power was up 25 cents to $37.75. Salomon Brothers issued a buy recommendation yesterday morning because it believed the stock's price does not reflect its value. Analyst Pamela Bonnie said the shares were worth $47.26, including the value of the Shandong power plant project. She said although the market was negative about China, power infrastructure spending would be less affected than other sectors of the mainland economy. Brokers said the strong support for the blue-chip stock was due to ''game playing'' by investors with July index futures positions, which expired yesterday. OCBC Securities institutional salesman Philip Leung said investors with long positions were trying to raise the index to reduce losses while investors who were short wanted to maximise returns. Television Broadcasts, which had weaken after News Corp bought a controlling stake in HutchVision earlier this week, bounced back with a 10-cent gain to $19.50. Mr Sweeney said TVB's recent decline provided investors with a major buying opportunity. He said the company would come out with strong first-half results, which would be reflected in the stock price based on good fundamentals. Windsor Industrial lost 3.7 per cent or 50 cents to $12.70 after it said profits for the year ended March 31 had dipped 3.5 per cent to $262.1 million. China Aerospace, formerly Conic Investment, posted the largest percentage increase, jumping 36.9 per cent or $1.55 to $5.75. Ming Pao Enterprise climbed 15 cents to $6 after it announced on Wednesday that profits climbed 59.6 per cent to $201.2 million for the year to March 31.