A note of caution crept into the Hong Kong market yesterday but it was not enough to stop share prices heading northwards for a third day after another cracking session on Wall Street.
The Hang Seng Index rose 122.75 points or 1.31 per cent to close at 9,459.14. Turnover was HK$7.33 billion.
Investors again took their cues from their peers in New York as the rally in United States equities extended into its fourth day, with the Dow Jones Industrial Average notching up a 4.8 per cent gain on positive earnings news from such blue chips as banking giant Citigroup.
However, there was more than a note of caution in Hong Kong as investors feared a US sell-off after weak guidance from Intel Corp.
DBS Vickers research head Elvic Ng said that on a dividend yield to savings deposit ratio, the market was undervalued but nonetheless said that the recent resurgence in equity prices was not the start of another bull rally.
'The negative surprise from Intel shows how fragile the US stock market is amid the possibility of a more prolonged slowdown, partially due to the threat of a US-led war against Iraq. In our view, this will remain a major overhang well into the first quarter of [next year],' Mr Ng said.
