A CLAMOUR for HSBC Holdings shares following the announcement of a fivefold increase in pre-tax profit at its UK subsidiary Midland Bank catapulted the Hang Seng Index up 143.34 points to a close of 7,307.54, a two per cent rise. HSBC, which accounts for 14.8 per cent of the index, rose $4 to close at $80, a record for the stock. The rise contributed 60 points to the index gain. Nomura Research head Clive Weedon said: ''Everyone jumped on to the back of HSBC. Once the market shot up, people started jumping in.'' On Wednesday Midland Bank announced a pre-tax profit of GBP385 million (about HK$4.49 billion). This compared with interim profit the previous year of GBP60 million. Analysts said the boost in interim profits at Midland was mostly due to the treasury operations of HSBC and Midland having been combined after the completion of the Midland takeover last summer. Mr Weedon expects some profit-taking on the market today. Blue chips rose across the board as bargain hunters preyed on the market, swelling turnover to $4.69 billion. Red chips such as Kader Investment also made big jumps. Kader's share price rose $5.90 to $30. The index last hit this level on June 2, when it touched 7,322.23. It has now climbed 8.25 per cent since its last trough of 6,750.33, which it set on July 23. Although the market had a buoyant response to good corporate news among the blue chips, Mr Weedon was cautious about what lay ahead. ''There are some big uncertainties ahead. The political dispute in Hong Kong is not resolved and we are going to see worse news from China on its economy. ''These uncertainties will look for a correction in the market. ''What you have seen happening in the market for the past few days is bargain-hunting because the market is cheap. ''I'm very cautious in the near term and bullish in the long term,'' he said, adding that it did not take much to change sentiment in the market. ''You only need another set of bad news from China to see these wildly positive investors turn wildly negative,'' he said. While the market was rejoicing about Midland Bank's surprisingly good interim result, words of caution were flying across analysts' desks. A considerable amount of the GBP385 million pre-tax profit was from its merged treasury activities, and Barclays de Zoete Wedd director Herbert Hui warned: ''The dealing [treasury] market may not be so favourable all the time.'' Jardine Fleming investment analyst Steven Li said: ''It is not the type of high-quality profit people would like to see because the market condition is unstable and volatile.'' The increase in bad debt provisions had also quashed hopes of a quicker recovery at Midland. Mr Hui said: ''Its exposure to continental Europe is higher than other UK banks. That explains why the bad debt charge went up when [rival UK clearing banks] Barclays Bank and National Westminster Bank reported decreases.'' The stalled loan growth suggested that the UK economic environment was still sluggish. ''In an uncertain economic environment, people are unwilling to borrow more,'' Mr Li said.