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HK stocks end lower, telecoms higher on C&W

HONG KONG: Hong Kong stocks ended lower on Tuesday but merger talks between Cable & Wireless (C&W HKT) and counterpart Singapore Telecommunications Ltd boosted telecoms and provided the day's only sparkle.

"The market started off down on Wall Street, but the Cable & Wireless HK news boosted the market, as did the continued rise of Hutchison and Cheung Kong on Monday's e-commerce deal," said Howard Gorges, a director at South China Securities.

The blue chip Hang Seng Index ended the day down 64.51 points or 0.43 percent at 15,103.04, after earlier dropping as low as 14,910.29 on sharp losses in New York.

It was eroded early in the day by falls in the technology heavy Nasdaq, which dropped 3.29 percent, and the Dow Jones industrials which fell 2.16 percent.

The telecoms sector was buoyed by news that SingTel was talking to Cable & Wireless Plc about a possible merger with which would create Asia's largest international carrier outside of Japan with a combined market capitalization of about US$61 billion.

jumped HK$0.45 or 2.36 percent to HK$19.55 after hitting a high of HK$20.10.

China Telecom (Hong Kong) Ltd joined the telecoms rally, surging HK$1.10 or 2.51 percent to HK$45.00, and contributing 68 points to the Hang Seng Index. China Telecom's parent owns 10.7 percent of C&W HKT.

"China Telecom wouldn't stay down," said Gorges. "It's in the right sector."

Cheung Kong (Holdings) Ltd and Hutchison Whampoa Ltd also propped up the market, continuing Monday's gain after announcing a joint venture called iBusinessCorporation.com.

Cheung Kong finished up $HK0.50 or 0.53 percent at HK$94.5. Hutchison closed the day unchanged, after earlier spiking 1.44 percent to HK$105.50.-Reuters