Heavyweight HSBC spurred the Hang Seng Index to its first gain of the week yesterday as market turnover also increased following two straight days of declines.
The benchmark index rose 0.15 per cent to end 23.13 points higher at 14,650.54, with turnover rising substantially to $17.5 billion from Tuesday's $16.1 billion.
HSBC added 0.16 per cent to $124.60 on the back of a research report from JP Morgan. Analyst Sunil Garg upgraded the lender to 'overweight' with a $144 target price, citing a substantial derating of the stock which had created a valuation gap between HSBC and its fellow banks.
'A reality check suggests that the market is just about discounting one-year's earnings, once again highlighting the excessive bearishness implied in the stock price,' Mr Garg wrote.
Elsewhere, DBS Vickers director of sales Peter Lai Wing-leung said the higher turnover for only a modest gain showed the market was suffering from a 'lack of direction' with avian flu and interest rates uppermost in investors' minds.
But he said there was some residual interest in blue chips and China plays, including China Mobile.