Hong Kong shares close firmer led by China Mobile after a seesaw session

By Editor on October 5, 2006 · Leave a Comment

HONG KONG (XFN-ASIA) – Share prices closed firmer after a seesaw session as gains in index heavyweight China Mobile (0941.HK – news) helped offset earlier losses driven by commodity stocks, dealers said.
The market opened firmer following Wall Street’s record finish overnight but soon fell into negative territory as commodity stocks were hit by a sharp drop in crude oil and metals prices, before reversing direction again in late trade.
Trading was cautious as investors await key US economic data this week.
The Hang Seng Index closed up 22.68 points or 0.13 pct at 17,629.21, off a high of 17,687.19 and low of 17,535.83.
Turnover was 43.19 bln hkd.
‘The market was fluctuating today as some investors decided to take quick profits after the market failed to break through (a key) resistance … but at the same time scores of investors chased select blue chips, which helped offset the (earlier) losses,’ said Peter Lai, sales director at DBS Vickers.
He said the market may get some direction only after the upcoming US economic data.
‘It will still be data-driven as there are not much local trading leads… For the mid- and long-term, I remain bullish on the market outlook as the fundamentals are strong,’ said Lai, who sees the market’s near-term resistance at 17,800 points.
The US will announce August factory orders tonight and the September non-farm payrolls data on Friday.
Large cap China Mobile outperformed, as it closed up 1.05 hkd or 1.88 pct at 57.0.
New listings Shui On Land and Lee Kee Holdings were also in focus, as well as SUNDAY Communications (NASDAQ: SDAY – news) which soared following parent PCCW (0008.HK – news) ‘s offer to buy out the unit’s assets.
PCCW has offered to pay 1.94 bln hkd to buy out SUNDAY’s network assets and business operations. SUNDAY closed up 0.10 hkd or 18.87 pct at 0.63 while PCCW was flat at 4.75.
Dealers said the generally positive sentiment towards new listings helped Shui On Land and Lee Kee Holdings.
Shui On Land closed at 5.90 hkd, up 10.28 pct from its offer price of 5.35 while Lee Kee was at 2.88 hkd, up 7.87 pct from its offer price of 2.67.
Lai noted that sharp falls in oil and gold prices prompted investors to sell down commodity stocks.
PetroChina was down 0.21 hkd or 2.52 pct at 8.12, Sinopec was down 0.15 hkd or 3.11 pct at 4.67 and CNOOC (0883.HK – news) down 0.23 hkd or 3.55 pct at 6.24.
Chinese miner Lingbao Gold was down 0.32 hkd or 4.89 pct at 6.22 and Zijin Mining down 0.16 hkd or 4.19 pct at 3.66.
‘I expect these stocks to see further correction as they have been up sharply (recently) and oil prices will likely to decline further,’ Lai said.
Properties were lower, with the sectoral sub-index losing 123.53 points or 0.59 pct at 20,707.71.
Cheung Kong (0001.HK – news) was down 0.20 hkd or 0.24 pct at 83.0, Sun Hung Kai down 0.30 hkd or 0.35 pct at 84.80 and Henderson Land lost 0.15 hkd or 0.34 pct at 43.70.
New World Development lost 0.10 hkd or 0.74 pct at 13.4 and Sino Land (0083.HK – news) was down 0.18 hkd or 1.31 pct at 13.6.
Banks were mixed, with HSBC unchanged at 141.80, Hang Seng (news) down 0.15 hkd or 0.15 pct at 98.45 and Bank of East Asia gaining 0.45 hkd or 1.24 pct to 36.65.
Chinese financial stocks saw some buying interest due to the bullish outlook for China’s economy, dealers said.
China Merchants Bank was up 0.16 hkd or 1.37 pct at 11.88 after hitting a record 12.10 hkd, while Bank of China was up 0.03 hkd or 0.89 pct at 3.41 and China Life up 0.32 hkd or 2.09 pct at 15.6.