Confusion over Tung's departure and interest-rate worries undermine early cheer sparked by strong US data Hong Kong stocks staged a slight recovery yesterday after last week's slump, backed by strong economic and job-growth figures in the United States but trading remained weak amid political uncertainty and concerns over interest rates. The Hang Seng Index opened 141.84 points ahead but lost most of those gains over the session and closed the day up 41.17 points or 0.3 per cent at 13,771.95. The index dropped 426.31 points or 3.01 per cent last week. 'The market is full of volatility but not much increment,' said Jason Ho, a director of sales at BNP Paribas Peregrine Securities. Mr Ho said political uncertainty about the future of Chief Executive Tung Chee-hwa, who has yet to confirm reports he is about to step down, was being played out on the market. 'The market is failing to break back through the 14,000 level and lacks a clear direction about whether it will go up or down,' said Mr Ho, who expected the index to trade between 13,500 and 13,700 for the rest of this week. Trading volume was thin yesterday with $16.76 billion worth of shares changing hands. The Hang Seng Index March contracts climbed 62 points to close at 13,672, a discount from the underlying index partly due to the upcoming dividend payment of heavyweight HSBC. Louis Wong Wai-kit, the head of research at Phillip Securities, said: 'Thin trading volume and lower index futures could be interpreted as a selling tendency by traders. 'Investors are cautious with a possible outflow of foreign investment, lack of surprises from company results and worries over rising interest rates. 'The market would get immediate support if the government made an announcement as soon as possible about Tung stepping down, leading to a smooth transition to a candidate who is co-operative and welcomed by the business community.' Traders are also waiting for clear buying signals from upcoming results announcements. Cathay Pacific Airways and two major mainland firms - China Mobile Communications and PetroChina - will report their full-year earnings this week. The H-share index rose 44.42 points, or 0.9 per cent, to 4,995.99 yesterday due to improved sentiment after Premier Wen Jiabao highlighted the need to safeguard investor interests in a speech to the National People's Congress at the weekend. The biggest gainers included Aluminum Corp of China, climbing 5.29 per cent to $4.975, Angang New Steel, up 4.61 per cent to $5.10, and Jiangxi Copper, which added 4.02 per cent to $4.525. Exporters also stood out after a US Labour Department report showed employers added 262,000 workers last month, the biggest gain since October last year. Li & Fung rose 3.81 per cent to $13.60, Yue Yuen Industrial jumped 4.12 per cent to $22.70 and Johnson Electric added 1.37 per cent to $7.35. Moulin Global Eyecare shot up 7.08 per cent during intraday trading and closed up 4.72 per cent at $6.65 after it said it would buy 500 stores in the mainland and expand market share in the US. Only four companies out of the 33 blue chips saw losses yesterday - property developer Henderson Land fell 0.29 per cent to $34.70, Denway Motors slipped 0.88 per cent to $2.80, while Cheung Kong lost 0.7 per cent to $70 and Hutchison Whampoa dropped 2.19 per cent to $67. The Hutchison losses came after its 3G mobile service provider in Britain was reported to have slashed tariffs on video calls by 60 per cent and launched a new low-cost monthly price package to win customers from rivals Vodafone Group and mmO2. In Hong Kong, Hutchison Telecommunications International Ltd (HTIL), a subsidiary of Hutchison, posted a net profit of $72 million, driven by an exceptional gain of $1.3 billion from the sale of shares in its Hutchison Global Communications (HGC). HGC, a fixed-line operator, reported a net profit of $97 million for last year. HTIL was unchanged at $8.20 while HGC fell 1.08 per cent to 45.5 cents. Fashion retailer I.T slipped 1.11 per cent to $2.225 after a 15.38 per cent gain on Friday's debut. Dealers said the counter was fully valued trading at about 20 times this year's estimated earnings, while the company was less competitive than Esprit due to a limited market in Hong Kong and the high land rents for its 99 outlets. Esprit was up 2.34 per cent at $54.75.