Shares up on oil plays

(China Daily HK Edition)
Updated: 2006-12-01 09:36

Hong Kong blue chips reclaimed the 19,000 level before easing slightly to gain 1 per cent yesterday after China Mobile rebounded belatedly while China Construction Bank and other mainland banks extended their rally.

Oil stocks led the index of Hong Kong-listed mainland companies, or H shares, up 1.7 per cent to more than recoup Tuesday's sharp losses. Resource stocks rose across the board as investors believe crude prices had bottomed and a weak US dollar was seen heralding higher commodity prices.

The benchmark Hang Seng index hit an intraday high of 19,033.4 before closing at 18,960.48, up 179.55 points. The index is still below its 14-day moving average following Tuesday's sharp pullback. The China Enterprises index of H shares ended at 8,546.60.

The day's turnover was HK$46.7 billion (US$5.9 billion) compared with Wednesday's HK$50 billion.

"All the end-of-the world Tuesday losses are now gone," said Anthony Lok, research director at BOCI Research Ltd. "We'll consolidate around these levels, but the 20,000 level will be difficult to breach."

Others said the market would maintain its uptrend as long as funds stay in the region.

"The most important factor is liquidity flow," said Renault Kam, director at Atlantis Investment Management. "So far, I don't see a big outflow of funds even though the market dropped more than 500 points on Tuesday."

China Mobile, the biggest boost to the blue chips, jumped 1.7 per cent to HK$65.4, after failing to recover with other blue chips on Wednesday.

Fixed-line operator China Telecom climbed nearly 3 per cent to HK$3.58 in heavy trade, extending Wednesday's gains and ahead of the Hong Kong IPO of its sister company China Communications Services, which raised the size and price range of its share sale last week, according to a term sheet.

PetroChina, the biggest lift to the H shares, chased higher crude prices to surge 3.1 per cent to HK$9.9, having earlier set a new high.

The top Chinese oil and gas producer also said yesterday that it hoped to find more than 300 billion cubic metres (bcm) of new proven natural gas reserves in 2007.

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