SPECULATION about a massive re-rating within the property sector played a major role in the Hang Seng Index's 173.24-point jump to 10,881.2 yesterday. Brokers said the index was now prepared to take another run at breaking 11,000, although there were some concerns that the drop-off in liquidity might prevent this from happening. On Tuesday, the first time the index seemed to be on the verge of piercing 11,000 points, it tumbled 290.5 points to 10,524.28. Turnover yesterday was $7.41 billion, down on previous days mainly because Tokyo was closed and many European and North American investment houses have closed their books for 1993. Barclays de Zoete Wedd assistant director Nial Gooding said the vacuum was enthusiastically filled by local investors, who finally took the lead after following that set by foreigners. December futures followed the lead of the cash market throughout the day to close up 170 at 10,890. January futures rose 160 points to 10,910 after hitting an intra-day high of 11,000. Mr Gooding said the property sector's sharp jump was caused by the record $3.69 billion bid for a Kowloon site by a consortium led by Sino Land last week. The property sub-index soared 637.74 points, 3.3 per cent, to 19,599.24. The biggest beneficiary was Sun Hung Kai Properties, which climbed $3.50 to $65 on heavy turnover of $386.2 million. The stock has jumped $8 or 14.1 per cent in the past week. Salomon Brothers vice-president David Williamson said many investors were enthusiastic about Sun Hung Kai's announcement last week that it would aggressively move into China after previously taking a conservative approach. Mr Williamson said there was also strong buying pressure from HSBC Holdings, which has recently bought 2.5 per cent of Sun Hung Kai on behalf of Hongkong Bank International Trustee and HSBC subsidiaries. There has also been persistent speculation this week that a merchant bank is preparing to issue covered warrants on Sun Hung Kai and is heavily buying stock. Cheung Kong, which has been a mediocre performer for the past two weeks, came to life again yesterday, climbing $1.25 to $43. New World Development was up $1 to $35, while Hongkong Land rose 20 cents to $25.70. The market was strong from the opening, cracking 10,850 within the first 15 minutes, before profit-taking knocked it back to about 10,800 at 11 am. The market was soon revitalised, however, and active local buying in the afternoon saw the index hit an intra-day record of 10,957. An overseas sell-off stopped the index from going through 11,000 but retail buying created firm support at 10,850. Hongkong Telecom, a favourite among foreign investors, dipped 30 cents to $15.70 while posting the day's highest turnover of $653.6 million. Brokers said there was heavy selling by Morgan Stanley, Merrill Lynch, Peregrine and WorldSec International. Allied Properties (Hong Kong) was also actively traded, with turnover of $280.2 million. The stock rose 12.5 cents, 6.1 per cent, to $2.175. HSBC Holdings gained $2 to $104 and Hang Seng Bank rose $2 to $72.50 on expectations of strong year-end results. Kowloon Motor Bus rose $1.60 to $22.10 on speculation that there might be a special cash dividend. The company announced it had applied for an average 19.6 per cent fare increase from April 1 to deal with higher operating costs and to improve service. Playmates International fell 30 cents, 4.8 per cent, to $5.90 after shareholders voted during an extraordinary meeting on Wednesday to list the company's property and toy divisions separately. Chi Cheung Investment fell 22.5 cents to $4.05 after a subsidiary of the People's Construction Bank said it would take a 13 per cent stake in the company in a private placement for $3.50 a share.