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A DAY of extremely volatile trading saw the Hang Seng Index fluctuate wildly before finishing slightly up on Monday's close.
Major blue chips were heavily sold by overseas institutions only to be snapped up by bargain-hunters.
Many institutions reduced positions in the lead-up to Friday's bank meeting to decide Hong Kong interest rates.
''Certain investors do not want to be surprised in case the banks increase the rates by more than 25 basis points,'' said Salomon Brothers vice-president David Williamson.
Brokers said the market seemed to have come out of its free-fall and had established a strong short-term floor at the 10,800-mark.
The Hang Seng Index ended 23.52 points or 0.21 per cent higher to close at 11,012.33.
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