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HK stocks close up, end three-day losing streak

HONG KONG: Hong Kong stocks closed higher on Friday, ending a three-day losing streak, helped by another overnight rise in the Dow Jones Industrial Average.

The Hang Seng Index closed up 252.40 points or 1.67 percent at 15,405.63. Turnover was HK$19.32 billion (US$2.49 billion), compared with HK$23.11 billion on Thursday.

In the broader market, advances outpaced declines 523 to 145. At one point this morning, the index was up almost three percent but was sold off by investors jittery after seeing it shed almost 13 percent in the previous three days, traders said.

"It's still a bit tentative," said South China Securities director Howard Gorges.

Any further rises from this level would rely heavily on solid supporting performances from the Dow, which closed up 130.61 points or 1.17 percent at 11,253.26 overnight, traders said.

"The market's really looking for direction from the U.S.," said a senior institutional salesman with a U.S. investment bank.

Despite this week's U.S. market volatility, the salesman said he was encouraged that investors were switching from tech stocks into blue chips, rather than dumping equities altogether.

He said this suggested that investors had already factored in higher U.S. interest rates.

Analysts also said there were signs that investors in Hong Kong were switching from the former high-flying technology stocks in favour of China plays.

Nomura International (HK) research head Mark Simpson said selected red chips were making a comeback after spending 1998 and much of 1999 in the doldrums.

Traders said investors were more bullish on selected China plays, helped by the Sino-U.S. World Trade Organisation (WTO) pact, hopes of asset injections and adequate Chinese economic growth.

"They're buying a story," said Gorges.

The red chip index closed up 45.64 points or 3.75 percent at 1,261.67, and the H-share index closed up 23.10 points or 5.27 percent at 461.62.

Pacific Century CyberWorks Ltd (PCCW) was the most active stock, rising HK$0.50 or 3.60 percent to HK$14.40 on turnover of HK$2.09 billion.

However, PCCW has still fallen HK$5.25 or 26.72 percent since its close on Monday.

Among red chips, China Telecom (Hong Kong) Ltd remained out of favour, losing HK$0.20 or 0.48 percent to HK$41.70 on turnover of HK$1.22 billion. China Telecom has lost HK$11.80 or 22.06 percent this week.

HSBC underpinned the index's rise, closing up HK$3.00 or 3.08 percent at HK$100.50. HSBC contributed 114.88 points to the benchmark index, according to Reuters 3000.

Traders and analysts said they expected Wall Street to call the shots for the Hong Kong market ahead of a Federal Open Market Committee meeting early next month that is expected to bring a 25 basis point rise in short-term interest rates.-Reuters