The five golden days have seen the index rise by more than 200 points, and with a total gain of almost 38 per cent this year, Hong Kong is now the third best performing major stock market in the world.

Only Finland, up 60 per cent, and Japan, up 57 per cent, have outperformed the local market this year.

Yesterday's record followed a yo-yo day of trading. Early deals saw the Hang Seng rushing up by a further 25 points, before selling by investors anxious to take some profits sent it sliding.

Then, ahead of the announcement of three major results - the interim profits of Cheung Kong, Hutchison Whampoa and Hang Seng Bank - confidence returned and the market blazed away once more.

Behind the surge in the local share prices is a growing belief among US and European professional investors in the future of the territory, and a fading of political concerns.

They appear to be prepared to ignore the present state of Sino-British negotiations about Hong Kong's political future.

When the ninth round of talks ended this week without any progress, the market shrugged off the stalemate and moved higher.

''I'm not sure these talks are all that significant and I believe the market is focusing on corporate fundamentals right now, which are very attractive,'' said Kirk Sweeney, research director with Lehman Brothers, a major US stockbroker with offices in Hong Kong.

Brokers in London said yesterday that investors on both sides of the Atlantic now regarded Hong Kong shares as some of the best bargains in the world.

Although there was disappointment in some of the results published yesterday - one of the key days in the Hong Kong corporate reporting season - Mr Li proved that he has lost none of his ability to surprise.

The $4.53 billion profit that he announced for his flagship company was 95 per cent ahead of the same period last year, and well above investors' and analysts' expectations.

And the figures did not reflect gains from the high-profile sale of a major stake in satellite station STAR TV to News Corporation, followed by the sale of the shares received in the cash and share purchase.

The deal was done after the end of the six-month reporting season to the end of June.

As well as being one of the winning stocks in the latest share surge, with a $3.50 gain since mid-July, Cheung Kong is also believed to have boosted profits with some handsome equity trading gains this year.

Cheung Kong's sister company, Hutchison Whampoa, in which it has a 45 per cent stake, reported a huge turnaround in its financial performance. Profits in the first half were $2.6 billion against a loss by Park 'N Shop, Watson's and Fortress group of $78 million in the same period last year.

Yesterday's big disappointment was the half-year profits from Hang Seng Bank, in which HSBC Holdings has a 63 per cent share.

In contrast to its parent's sparkling results, which helped light the fire under the stock market, Hang Seng results were below expectations.

A 17.5 per cent jump in interim profits to $2.75 billion was said to be disappointing by analysts, and reflected a drop in interest the bank earned on deposits.