Peregrine sales director Chris Malpass said Hongkong Telecom had under-performed in relation to its importance in the index, accounting for 9.6 per cent of the index weighting.

Brokers said many overseas investors snapped up the stock in a day marked by rotational buying.

Brokers believe the record-breaking jumps by the Hang Seng Index in recent days have caused investors to become more cautious.

Barclays de Zoete Wedd director K.S. Ng said: ''At this level, people are looking for good-quality laggard stocks which have been neglected by the market. They are considering such stocks as they turn cautious.'' Hongkong Land rose 60 cents to $17.50 on turnover of $149.2 million while another laggard stock, Hongkong Electric gained 40 cents to $19.10 on turnover of $112 million.

The stocks moved the index 13.88 points.

The market jumped almost 25 points after 15 minutes of morning trading then retreated after some investors locked in profits.

When trading resumed in the afternoon, buyers returned to push the index to an intra-day high of 7,615.06.

Turnover was a healthy $4.64 billion.

August index futures closed at a 53.26-point discount to the cash market.

Brokers said yesterday's main buying action came late in the afternoon as the time for the announcement by Cheung Kong and Hutchison of interim results drew closer.

It was believed some investors got wind of the results ahead of the announcements.

Hutchison's price was unchanged at $22.90 as the company reported an interim attributable profit of $2.5 billion, a turnaround from the previous period's loss of $78 million.

Cheung Kong gained 10 cents to $27.90.

It reported a 94.5 per cent jump in attributable profits to $4.53 billion for the first six months.

The company attributed its strong performance to property sales in Hong Kong and improved earnings from Hutchison.

Hang Seng Bank fell 50 cents to $61 on turnover of $144.85 million.

The company yesterday announced interim results up 17.5 per cent over the previous year to $2.74 billion, below market expectations.

Allied Group was again the heaviest-traded stock, gaining two cents to $1.11 on rumours that Li Ka-shing was interested in buying into the company.

Sassoon Securities assistant general manager Michael Ng Wai-ming said: ''While Mr Li has denied the rumour, punters are still looking to buy rather than sell.'' Crosby Securities dealing director Willie Chau Wing-hung said the stock was heavily traded as rumours persisted that the Allied group was a target for a back-door listing by a mainland concern.

Wharf Holdings gained 10 cents to $20.80 following the announcement of its 44 per cent net profit rise in the first half to $1.38 billion, due to property disposals.

Parent company World International also gained $10 cents to $11.40.

Sun Hung Kai Properties added 25 cents to $39 following the release of Land Registry statistics showing a surge of almost 50 per cent in property deals.

Jardine Strategic Holdings gained 40 cents to $26.40 on turnover of $49.73 million.

CITIC Pacific put on 20 cents to $17.10.

Peregrine Investment gained 10 cents to $13.10.