VOLATILITY reigned on the securities markets yesterday, led by futures which swung more than 265 points and helped push up the cash index after an early morning spate of profit-taking. The Hang Seng Index ended 48.18 points higher at 8,767.5 on healthy turnover of $5.34 billion, slightly down on the amended figure of $5.82 billion for Friday. Peregrine sales director Chris Malpass said: ''With October contracts so near to expiry trading at a 60-point premium, the direction of the market is still fairly anchored and straight-forward, and that direction is upwards after this small period of consolidation.'' The modest consolidation began just a week ago after a 13-day rally that sent the index rocketing 20.89 per cent. Brokers reckon strong buying support will continue to kick in at 8,600. Stocks fell sharply on opening, on a mix of continued weakness from Friday and gloomy sentiment over Merrill Lynch's decision to down-weight its portfolio. The index tumbled almost 100 points to 8,624. Within half an hour a reversal was taking place, with general optimism enhanced by an advancing picture of lower global interest rates following the Bundesbank's cut. Sassoon Securities assistant general manager Michael Ng Wai-ming said: ''Now there is speculation Britain will cut its prime rate also. There is a lot of money from Europe punting the Far East and Hong Kong is one of the particular places they are re-rating.'' But buying remains highly selective, with yesterday's rise again being spearheaded by property stocks. The property sub-index rose 1.75 per cent with strong performances from New World Development, up $1 to $24.70, and Henderson, up $1.25 to $31.50. Of the rest, the finance sub-index was strongest on a 0.36 per cent rise, although still under-performing the main index. The utilities and commercial and industrial sub-indices each rose 0.07 per cent. Action centred on Hutchison, which fell 20 cents to $26.90 on the highest turnover, $352.02 million. Rumours of potential write-offs connected to the ill-fated UK telecommunications ventures ripped into the share price as any buyer into the British businesses is likely to buy in at a sharp discount. Next in turnover was JCG Holdings, surging 20 cents to $5.65 after Friday's placement of 55 million shares at $5.35 each. Second-and third-liners once again popped up in the top 10 most-active slots, suggesting local retail investors are playing more aggressively. Brokers also cited an influx of Japanese money and to a lesser extent European fund managers weighing in. Emperor (China) soared 22.43 per cent to $6.55 on the third-biggest turnover, $239.06 million. Allied Group was heavily traded, with $209.45 million worth of shares changing hands, but the price itself edged up just two cents to $1.26. Rumours that Li Ka-shing plans a full buyout of the beleaguered group intensified after Cheung Kong said last week it had amassed a 15.45 stake. The fifth-busiest stock, Shougang International, the former Tung Wing Steel, shot up 9.77 per cent to $4.775, with good feeling over the forthcoming listing of Maanshan Iron and Steel spilling over into other companies in the same business and talk of animpending roadshow. Market speculation suggests brokers will shortly be taking the one-time Allied subsidiary on the road to meet fund managers across Europe and America. Among the blue chips, HSBC Holdings gained 50 cents to $86.50 and Hang Seng Bank was steady at $57. China Light and Power slid 50 cents to $49.50 on the back of $119.97 million worth of deals and Hongkong Telecom put on 10 cents to $15.60. There were a host of companies acknowledging erratic price and volume movements, but denying any knowledge as to why. They included Companion Build, CIL Holdings, Paragon Holdings and China Investments Holdings. Chee Shing Holdings director Francis Cheung Nim Che reported an increase in his interests in the company by 1.66 per cent of its issued share capital.