PROPERTY stocks continued to dominate the market's upward trend yesterday as the Hang Seng Index broke the 12,000-point barrier. On the back of strong buying of property blue chips, the index went up a further 198.1 points, or 1.67 per cent, to a record 12,086.49 on the first business day of the year. Turnover was $9.22 billion, reflecting sustained overseas buying of local stocks, which are still considered cheap compared with other international markets. DBS Securities research director Percy Au-young said because the property market was bullish, buying of property stocks would continue, further driving the market's upward movement. But he cautioned that a market correction should not be too far away following the huge rises of recent weeks. He suggested that investors should consider taking their profits now in anticipation of a consolidation. Analysts said overseas funds, especially from Japan, were buying strongly. Some brokers suggested buying property stocks with strong asset backing, but others recommended utility laggards with high earnings potential. Yesterday, the index opened optimistically, gaining 133 points and breaking the 12,000 psychological barrier within the first 15 minutes. Profit-taking quickly emerged in the wake of the record trading, pulling the index down more than 200 points in the next hour. But then selling pressure disappeared and bargain-hunters stepped in to snap up blue chips, firing the index to a morning close of 11,921.84, up 33.45 points from the previous trading day. In the afternoon, buying support increased in blue chips and continued until the end of the session. The broader-based All Ordinaries Index closed up 125.54 points at 6,200.72. The Hang Seng Index January future closed up 355 points at 12,315, representing a premium of 229 points to the spot index. The February future climbed 335 points to 12,335. The property sub-index was the star performer, jumping 572.95 points, or 2.57 per cent, to 22,812.35. More than half the top 10 most actively traded stocks were property or property-related companies. Sun Hung Kai Properties put on $2 to close at $73, while Cheung Kong rose $1.50 to $48.75. Hopewell, the most actively traded stock, jumped 30 cents to $10.40 on a turnover of $414.98 million. Hang Lung Development, considered a laggard among property stocks, surged $1.50, or 7.9 per cent, to $20.40. Henderson Land Development rose $2 to $59, while Hongkong Land increased 60 cents to $28, Wheelock added $1 to 22.80 and Wharf jumped 50 cents to$37.25. Second and third-line property stocks were among the top gainers in active trading. Tai Sang Land rose $1.70, or 29.3 per cent, to close at $7.50; Kwong Sang Hong gained 87.5 cents, or 24.1 per cent, to $4.50; and Hon Kwok Land picked up 60 cents, or 16 per cent, to $4.35. The utilities sector also performed well, with the sub-index rising 270.49 points, or 2.08 per cent, to 13,249.98. Hongkong Electric was up $2.50 to $34.75, while Hong Kong and China Gas put on $1.90 to $24.30 and Hongkong Telecom rose 10 cents to $16.40. The commerce and industry sub-index improved 118.08 points, or 1.34 per cent, to 8,925.92. The banking sector was less exciting, with the finance sub-index picking up 56.52 points to 10,194.15. HSBC and Hang Seng Bank were unchanged at $115 and $75.50, respectively, although HSBC was the third most active stock on a turnover of $291.75 million. But Bank of East Asia, which is celebrating its 75th anniversary, climbed $4.50 to $57.50. Liu Chong Hing Investment soared $2.20, or 13.8 per cent, to $18.20 on the back of its proposal to spin off its banking operation for a separate listing.