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HK stocks end sharply up, China Tel leads index

HONG KONG: Hong Kong stocks soared to a sharply higher close on Wednesday with telecom and high-tech stocks boosted by a third consecutive record on Nasdaq and global enthusiasm for the sectors.

The benchmark Hang Seng Index ended 590.73 points or 3.64 percent higher at 16,819.46 after reaching a high of 16,967.90.The Hang Seng, whose percent gain on Wednesday was the largest since it jumped 3.90 percent on October 29 last year, has risen around seven percent over the past five trading days.

China Telecom (Hong Kong) Ltd led the index up on Wednesday, solidifying its new position as Hong Kong's highest-valued company and tipping a record high of HK$67.00 on turnover of HK$1.52 billion.

Total turnover for the broader market was a hefty HK$25.7 billion, well ahead of Tuesday's HK$18.6 billion. A total of 307 issues rose while 409 fell."Total turnover was the highest since mid-1997," said Antony Mak, sales director with Vickers Ballas Hong Kong Ltd.

China Telecom, which is the Chinese mainland's largest mobile telephone operator, accounted for almost 40 percent of the Hang Seng's rise and came amid a global rally in telecoms and technology stocks.

"The market is focusing on telecoms," said Jolyon Petch, head of HK research at ING Barings.

Investors are buying cellular stocks in the wake of the Vodafone AirTouch Plc Mannesmann AG merger last week, analysts said.

"People are using the deal as a way of valuing telecom stocks," Petch said. "Global valuation and continued consolidation globally (in the telecoms industry)" is boosting the group, he added.

The Nasdaq rose to a record high for the third day in a row. Shares in New York were boosted by a five percent rise in industrial productivity and a less-than-expected rise in unit labour costs. In the past month, China Telecom has soared 43.8 percent. Expectations the telecoms giant will be included in Morgan Stanley Capital International's (MSCI) China Free Index has boosted the stock.

China Telecom is also used by investors who want to enter the Asian market, as the company makes up almost 21 percent of the Hang Seng index, according to Reuters 3000.

China Telecom finished the day up 7.08 percent or HK$4.25 at HK$64.25.-Reuters