Hong Kong stocks edged higher yesterday amid more favourable sentiment from overseas markets, but fell back from earlier highs after disappointing results from Bank of East Asia.
With an interim net profit at the lower end of expectations, Bank of East Asia caused some concern that the economic recovery may not be as strong as initially believed, said Herbert Lau, head of research at Celestial Asia Securities.
'The market felt a bit let down,' he said.
Bank of East Asia's shares came under heavy selling pressure and finished the day 3.07 per cent lower at $22.10 after being 0.87 per cent higher before the earnings were released.
Trading volumes in the counter were about five times greater than the recent average and the fact that some selling orders were quite large suggested that institutional investors were among those cutting their exposure, traders said.
Other banking stocks gave up some of the earlier gains, but most still ended higher, suggesting that investors are holding out for better numbers from HSBC Holdings and Hang Seng Bank, which report on Monday.