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HK stocks close higher on handful of blue chips

HONG KONG: Hong Kong stocks ended higher on Tuesday, lifted by a handful of blue chips, particularly market heavyweight China Telecom (Hong Kong) Ltd 0941.HK.

The blue chip Hang Seng Index closed up 214.64 points or 1.38 percent at 15,789.20. Turnover was HK$13.01 billion, compared with HK$12.98 billion on Monday, but well down on Friday's HK$17.51 billion. Declines outpaced advances by 369 to 255 in the broader market.

Traders said investors were pulling back from the market, with turnover trending down from last week, and buying interest was focusing on a select few: China Telecom, Hutchison Whampoa Ltd and its parent Cheung Kong (Holdings) Ltd.

Those three stocks contributed 283.54 index points, offsetting declines in HSBC and Sun Hung Kai Properties Ltd, according to Reuters 3000. They accounted for almost 13 percent of turnover in the broader market.

"It's up on a handful of stocks...The rest of the market is not moving," said Vickers Ballas sales trader Antony Mak. "The (market) leadership is still fairly narrow," said Howard Gorges, a director with South China Securities.

Traders said the market was unable to push upwards decisively after its retreat in the first trading days of the New Year.

"We're in consolidation after the shakeout," Gorges said.

Mansion House Securities research head Stanley Ng said he could understand why Hutchison and Cheung Kong were performing so well, but not China Telecom.

"China Telecom is a bit difficult (to explain)," Ng said, adding that the market had had ample time on Monday to factor in the benefit of a cut in digital transmission line leasing fees.

China Telecom closed up HK$2.60 or 5.82 percent at HK$47.30.

Hutchison was up HK$4.00 or 3.88 percent at HK$107.00 and its 49.97 percent parent Cheung Kong was up HK$5.00 or 5.68 percent at HK$93.00.

Traders and analysts said Hutchison and Cheung Kong both gained from optimism over their new mega-portal product, while Hutchison also benefited from a spike in the share price of Mannesmann AG, in which it is a major shareholder.-Reuters