Observers believe short covering by foreign players may explain the sharp increases in many counters
Stocks rallied in Hong Kong yesterday as investors chased property counters, viewing them as reflation plays after the government said the city had come out of its 68-month run of deflation.
Brokers also said sentiment improved slightly as oil prices continued to recede.
Some believed the stock gain was largely brought by investors, particularly those from overseas, covering short positions made in the past few weeks.
The Hang Seng Index range-traded in the early session but ended the day 1.72 per cent higher, gaining 214.72 points to 12,646.49, after staging a surprise surge in the first half hour of afternoon trade. Turnover was brisk as shares worth $14.99 billion changed hands.
Property counters led the surge.
