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HK stocks close little changed, rate fears prevail

HONG KONG: Hong Kong stocks closed barely changed on Tuesday after a choppy day in which early gains were hit by profit-taking by investors jittery about interest rates.

The benchmark Hang Seng Index closed up 13.95 points or 0.09 percent at 15,862.10. Turnover was HK$19.81 billion (US$2.55 billion) compared with HK$19.57 billion on Monday.

While some Asian markets were lifted by Monday's news of Asia Online Inc's merger with Time Warner Inc, Hong Kong investors were focusing on interest rates.

Analysts and traders said profit-taking kicked in when the market flirted with 16,200, as investors cashed out ahead of a February 1-2 U.S. Federal Open Market Committee (FOMC) meeting which is expected to result in a 25 basis point rate rise.

"People are getting cautious. They don't want to push the market up too much," said Vickers Ballas sales director Antony Mak.

Declines outpaced advances by 390 to 267, with 254 issues unchanged.

Analysts said the AOL-Time Warner deal lifted only a handful of local media stocks including Paramount Publishing Group Ltd, Oriental Press Group Ltd and SCMP (Holdings), none of which was a blue chip.

Paramount gained HK$0.44 or 36.07 percent to close at HK$1.66, Oriental Press ended up HK$0.19 or 11.66 percent at HK$1.82 and SCMP rose HK$0.70 or 11.11 percent to HK$7.00.

Mansion House Securities research head Stanley Ng said investors saw potential for some link-ups between Hong Kong media firms and local Internet and telecommunications stocks-Reuters.