Turnover was a modest $6.27 billion as 1.4 billion shares changed hands.

Turnover was the lowest since December 3 when $5.78 billion was recorded - barring the $5.22 billion on Christmas Eve when the market was open only half a day.

The index opened at about 11,394 points, surging quickly to the day's high of 11,547.84 within the first 45 minutes of trading.

''It rose in the morning with a rush of overseas buyers relieved by the new terms on mortgage rates which were less harsh than people had speculated,'' said Crosby Securities dealing director Willie Chau Wing-hung.

''Investors realised that Friday's fall was overdone as not the entire property sector was affected by the new policy. The rebound on the open was normal,'' said PBI Securities sales director Ivan Leung.

But the market then lost grip, with the index tripping down to 11,485.65 points at 11.15 am. It hovered at that level for about half an hour, before taking a dive to touch 11,380 shortly before lunch.

''The market receded as local funds were selling blue chips and unit trusts were making redemptions. It was also rumoured that some funds were being channelled to Japan,'' said Mr Chau.

''There was some profit-taking at that level,'' said Mr Leung.

When trading resumed in the afternoon, there was more selling, pushing the index to the day's low of 11,364.72 within 15 minutes.

But strong buying quickly re-emerged, pushing the index back above 11,500 about 15 minutes before trading concluded for the day.

''In the afternoon, the futures rose with widening premium, tempting arbitrageurs to sell futures to buy stocks to make a gain,'' said Mr Chau.

Mr Leung said: ''Investors entered the market again with their concerns on the airport project relieved as Britain sounded as if it was backing down a little.'' Overall, the market did not see much activity, with some investors giving it a wide berth.

''Some investors are waiting for news from the airport negotiations,'' said Mr Chau.

''It was very calm. There was no panic buying or selling,'' said Mr Leung.

Of the sectors only the utilities lost ground.

China Light and Power was among the blue chips that were sold off by fund managers.

Brokers said fund managers were switching from China Light into Hongkong Electric, which showed steadier growth.

China Light was the third heaviest traded stock in value terms, but it bucked the general upward trend to drop 75 cents or 1.55 per cent to $47.50 as 5.62 million shares worth $266.48 million were dealt.

This compared with the daily average of 3.46 million shares last week.

Hong Kong and China Gas also weakened on the heels of last week's 50 million covered warrant issue on the stock.

It shed $1 or 4.44 per cent to $21.50 on the day's 10th highest turnover of $132.85 million generated by the trading of 6.03 million shares.

Trading records released by the stock exchange yesterday revealed that Cheung Kong increased its stake in Hutchison Whampoa by 0.92 per cent or 33.19 million shares to 43.98 per cent on January 28.