Overseas rallies lift sentiment, but Hang Seng stuck in narrow range as investors await earnings results Firmer overseas markets and strong earnings reports from China Life Insurance and Angang New Steel helped breathe new life into Hong Kong stocks yesterday after three straight days of declines. But brokers noted that the rebound felt shaky as trading volumes were thin and said the near-term direction of the market would continue to depend on developments on Wall Street. Economic data, especially those on growth, will continue to attract investor attention, but earnings are expected to take over increasingly as the first-quarter reporting season gets under way. Asian markets bounced yesterday, supported largely by stronger than expected earnings reports from US semiconductor manufacturer Texas Instruments and from South Korea's second-largest electronics maker, LG Electronics. Intel and General Motors were both due to report later yesterday. In Hong Kong, the gains were fairly evenly spread and, in the absence of a major blue-chip mover, the Hang Seng Index hovered in a narrow 75-point range throughout the day. It closed up 0.67 per cent, or 88.86 points, at 13,444.09 after retreating from an intraday high of 13,503.29. Turnover fell back to $12.92 billion - the lowest in a week - from $21.39 billion on Monday. 'The rebound was expected as the market was a bit oversold, but the turnover is a reflection of the very cautious sentiment,' said Ben Kwong Man-bun, director of investment services at KGI Asia. 'Short term, 13,500 is likely to be the limit [for the index] and, after this rebound, the market may still look to test the 2004 low [of 13,320 points],' he said. DBS Vickers sales director Peter Lai Wing-leung said 13,500 was little more than a psychological barrier, with the first 'real' resistance to be found near the 150-day moving average, now at 13,649. HSBC helped prop up the index after strong earnings by US rival Bank of America pushed its share price 50 cents, or 0.41 per cent, higher to $123. Property investors were also relatively strong following good sales at record prices at Sun Hung Kai Properties' new luxury residential project. One speculator reportedly even managed to resell his just-bought unit in the Arch within 48 hours, making about $1 million in profit, suggesting prices in the primary market will continue to go up. SHKP rose 0.35 per cent to $71.50, while Henderson Investment outperformed all other blue chips with a 2.42 per cent gain to $10.60 and Swire Pacific rose 1.59 per cent to $63.75. Hotel operators also attracted interest ahead of China's week-long May Day holiday, which is expected to see hordes of mainland tourists cross the border. Noticeable gainers were Shangri-La Asia, which added 3.36 per cent to $7.70 and Regal Hotels, which edged up 1.41 per cent to 72 cents. However, a lot of the buying interest focused on the H shares, which had underperformed the blue chips in the recent downtrend. China Life Insurance set the pace with a 3.09 per cent gain to $5 after reporting a 22.4 per cent rise in last year's net profit to 7.17 billion yuan, well above the 4.19 per cent gain forecast by analysts in a Thomson Financial poll. The good numbers also helped lift PICC Property and Casualty's share price 3.45 per cent to $2.25. Ping An Insurance, which met expectations with a 34 per cent gain in earnings for last year, rose 1.69 per cent to $1.69. Brokers also noted a recovery in most resources stocks, including oil producers Sinopec, CNOOC and PetroChina which gained between 1.69 per cent and 2.14 per cent as crude oil futures returned to more than US$50 a barrel. Gold and copper miner Zijin Mining advanced 4.17 per cent to $3.125 and Jiangxi Copper rose 2.61 per cent to $3.925. Angang New Steel gained 3.73 per cent to $4.175 after disclosing to the stock exchange that its net profit more than doubled to 603.9 million yuan in the first quarter. First-half profit might rise more than 50 per cent from the 696 million yuan reported a year earlier, it said. Among the smaller counters, K Wah Construction Materials jumped 29.4 per cent to $11 in the first minute of trading on news that it was planning to buy 97.9 per cent of the economic interest in Galaxy Casino, including the gaming licence, from its controlling shareholders and other vendors for $18.41 billion. The stock, suspended from trading since early last month, saw immediate profit taking at those levels but still ended 14.1 per cent higher at $9.70 amid heavy trading surpassed only by HSBC. 'We saw some retail speculators buy [K Wah Construction] in the morning, but when it didn't work out they cut the shares loose again,' said one retail broker who noted that the casino injection had been largely expected and had already helped drive the share price 170 per cent higher since mid-December.