An unexpectedly keen investor response to PetroChina's mega share placement and easing oil prices yesterday triggered a sharp rally that pushed the Hang Seng Index back above the psychologically important 15,000 level.
Heavy buying of PetroChina saw its turnover reach $2.45 billion, making it the most actively traded stock of the day.
In a reversal of normal selling pressure after a share placement, PetroChina climbed to an intraday high of $6.45 before finishing the day 0.79 per cent higher at $6.35.
'Short selling of PetroChina was heavy in the past few days as investors expected a share placement. Now, they need to cover their short positions,' said Kenny Tang Sing-hing, an associate director at Tung Tai Securities.
Softening oil prices also brought positive news to the market. New York September crude fell below US$68 a barrel at one stage in Asian trading after the US government's offer to release some of its reserves after the devastation caused by Hurricane Katrina.
The string of positive news sparked broad-based buying that drove 30 of the 33 blue chips higher.
