The Hang Seng Index ended the first quarter with a disappointing performance yesterday, after market rumours suggesting that index heavyweight China Mobile might place shares triggered a sell-off in the counter. The blue-chip index rose 83.66 points to an intraday high of 15,964.35 soon after the market opened, supported by over-the-counter index futures settlement activity and window dressing by fund managers. Market sentiment, however, reversed in the afternoon after the China Mobile share placement rumours spread, raising fears that more blue chips would line up to tap the equity market for funds. Nervous investors lined up to offload shares of the mainland's largest mobile-phone operator, dragging the counter down 2.16 per cent to a $40.75 finish. 'I suspect it's just a rumour as the company is not hungry for funds,' said Kenny Tang Sing-hing, an associate director at Tung Tai Securities. Other brokers suggested that China Mobile might need funding for future 3G development. China Mobile alone accounted for 55.8 points of yesterday's index loss. The Hang Seng Index fell 75.65 points, or 0.48 per cent, to end the day at 15,805.04, for a first-quarter gain of 6.24 per cent. Turnover rose to $33.42 billion from $32.36 billion on Thursday. Property counters generally fell yesterday after several local banks matched the US Federal Reserve's 25 basis point increase in mortgage lending rates. Cheung Kong eased 0.96 per cent to close at $82.25, Henderson Land retreated 0.69 per cent to $43, and Sun Hung Kai Properties shed 0.38 per cent to end at $78.80. Mr Tang said the market might experience a greater correction this month as trading was usually quiet in the second quarter, enabling futures traders to use the interest-rate overhang as an excuse to pull down the market easily. The H-share index closed flat at 6,703.78 points yesterday, moving up by 0.3 point. The benchmark climbed 25.76 per cent in the first quarter. Leading the gainers was Zijin Mining, which surged 8.93 per cent to close at $6.10 on soaring gold prices. Spot gold touched a 25-year high of US$588.65 an ounce on Thursday as investment funds bet that precious metals would outperform US stocks and bonds. Also benefiting from the high gold prices was Lingbao Gold, which rose 3.96 per cent to $5.25. Ping An Insurance softened 1.23 per cent to $20 after a 3.31 per cent gain on Thursday. The insurer said on Wednesday that its profit for last year had risen 36 per cent on big investment gains. Morgan Stanley said in a daily note yesterday that Ping An might face a challenging investment yield outlook despite the company's bullish comments about alternative investment channels and enhanced opportunities existing in the equity market. The investment bank downgraded its yield assumption for Ping An by 25 basis points for the period to 2009 and 15 basis points for 2010. Meanwhile, market sources said retailer Beijing Jingkelong Supermarket Chain was likely to set the valuation of its up to $600 million float in between that of Lianhua Supermarket and Wumart Stores. Lianhua is trading at 21.42 times its forecast earnings and Wumart at 33.53 times. Sources said Jingkelong would start pre-marketing its offering next week and was tentatively set to kick off its retail offer on April 18. DBS Asia Capital is the listing sponsor.