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Carrie Lee

A ROBUST 12.63 per cent bounce in Jardine Matheson, up $6 to $53.50, buoyed the otherwise languid market as banking stocks fell.

  The Hang Seng Index dipped a modest 37.18 points or 0.4 per cent to 9,197.03, on a low turnover of $4.7 billion generated by 876.56 million shares.

  The interest rate rise, which will mean narrower profit margins for banks, hit prices of financial counters such as HSBC and Hang Seng Bank.

  Excluding Jardine Matheson, which topped the turnover list at $549.05 million, the exchange saw a turnover of just $4.15 billion.

  Brokers attributed Jardine Matheson's rebound to its good fundamentals including a low price-earnings multiple and to the stock having been oversold.

  It was also buoyed on rumours that the group's companies were targets for acquisition, and that short sellers were snapping up the stock in anticipation of even lower prices.

  Some investors also started to realise that a de-listing on Hong Kong would only affect local retail investors but not institutional players, brokers said.

  Big orders for the stock, which accounted for a 24.62-point gain in the index movement, helped shoot the index up during the first 15 minutes of trading.

  ''There wasn't much selling on Wall Street after the interest rate rise [last week] . . . some people feel the worst is over,'' said South China Brokerage managing director Howard Gorges, adding that fund managers started to buy Jardine Matheson.

  However, weak sentiments emerged later in the day as investors were held back by a lack of good news in the face of political uncertainties on the international front, which had lately been affecting Wall Street's performance.

  They included those over North Korea, the Whitewater case, the assassination in Mexico and the elections in South Africa.

  ''They have an effect of making people a bit wary,'' said Mr Gorges. ''Investors were not chasing prices upward.''   ''In the short term, investors can't see any upside potential. And while there are so many uncertainties people look at the downside risks,'' said OCBC Securities senior manager Philip Leung.

  Nomura vice-president Gary Wong said: ''Sentiment was a little bit weak as far as the banks are concerned.''   In the afternoon, the index skidded down a slippery slope on the back of fund redemptions in the region, especially by Japanese institutions.

  A source said Nomura rushed to dump blue chips for cash ahead of the Japanese financial year-end on Thursday.

  Mr Leung said: ''After three o'clock, arbitrageurs came into action, selling shares and futures. So shares fell, including those which had previously held strong.

  ''People don't think the market will go higher than the 9,400 to 9,500 level achieved last week. Bargain-hunters were simply not there.

  ''Investor interest was fading, with only short-term traders active in the market. Investors would rather focus on futures.

  ''And as international markets also traded low, investors had become more cautious.

  ''Also, a buying mood was just not there as the long holiday is round the corner. Brokers are packing up for Easter.''   Financial stocks were the biggest losers, with the Hang Seng financial sub-index losing 2.17 per cent.

  Property shed 0.91 per cent, less seriously hit by the interest rate rise than finance as the property market was still bullish.

  Buoyed by Jardine Matheson's strength, the commercial and industrial sector was the only one to gain, rising 1.11 per cent.

  Jardine Matheson was the second best performer of the day. It registered the day's highest turnover of $549.05 million on the back of 10.41 million shares - the day's 10th highest trading volume.

  Meanwhile, Jardine Strategic rose 8.8 per cent, or $2.20, to $27.20 as the day's fifth biggest gainer. It posted the day's eight highest turnover of $129.07 million.

        HSBC dropped 2.79 per cent, or $2.50, to $87 on the day's second highest turnover of $421.86 million on 4.78 million shares traded.



Jardines jumps 12.6pc as banks fall on rate rise