Profit-taking deflates index

Carrie Lee

SIGNIFICANT selling of Hang Seng Index stocks continued to be seen in London overnight.

Profit-taking in Hong Kong yesterday took 147.23 points or 1.57 per cent off the index to 9,204.88, on a slimmed-down but still buoyant turnover of $6.64 billion.

In London last night Hongkong Telecom was down 10 cents from the Hong Kong close at $16.20.

HSBC was down about $1.50 to the $86 level, Cheung Kong fell 60 cents to $35.65 and Sun Hung Kai Properties was down a similar amount at $53.40.

Yesterday's fall in the index during the day came on the heels of Wednesday's 290-point plunge, which had left brokers tipping a more modest consolidation yesterday.

''I didn't expect a fall this big. I had thought there were funds picking up,'' said Nomura International vice-president Gary Wong.

He termed it a continued technical correction, with some support at 9,200 to consolidate the market from the recent excessive gains.

South China Brokerage director Howard Gorges said: ''There was still some profit-taking and also when the market falls a lot in one day and is weak the next day, those who are nervous start to sell.'' Bearish sentiment on the London exchange also heightened the selling pressure in local trading.

It appears that brokers' bullish anticipation of the index achieving 10,000 points this week has vanished.

''Obviously, the market is in over-bought territory. Selling is just normal,'' said Yamaichi International (HK) research director Alex Tang Yee-yuk.

''Technically, the index had had too great a rise. The market would not be strong if it had continued to go up,'' he said.

In yesterday's Hong Kong trading the index swung through a 164.2-point range from a low of 9,189.11 to a high of 9,353.31.

Hongkong Telecom's results, which were in line with expectations, did not seem to affect the market, brokers said.

The counter lost 20 cents or 1.2 per cent to $16.30.

As the market euphoria evaporated, turnover also shrank, down almost $3 billion from the previous $9 billion.

Brokers tipped support for the index at the 9,000 level in today's trading.