HK stocks bounce back after losing streak

Hong Kong blue chips rose yesterday, a day after suffering their biggest daily decline since September 2001, as investors bought beaten down shares across the board, helped by recovering Asian markets.

The market arrested its five-session losing streak as global lender HSBC Holdings plc and bourse operator Hong Kong Exchanges and Clearing (HKEx) clawed back some of their recent heavy losses.

"This is the day after," said Steve Cheng, director at Shenyin Wanguo. "We're putting the pieces back together."

The market recorded its best one-day percentage gain since Nov 29, but that was before it fell more than 2 percent and breached its 200-day average.

By mid-session, shares were off the fresh four-month lows they struck earlier, thanks to firmer markets across most of Asia.

The benchmark Hang Seng Index closed up 2.7 percent, or 664.13 points, at 25114.98.

The China Enterprises Index of H shares, or Hong Kong-listed shares in mainland companies, gained 3.3 percent, or 465.29 points, to 14481.41, having earlier struck lows not seen since Aug 29.

Mainboard turnover was HK$138.3 billion compared with Wednesday's HK$145.1 billion.

"Hong Kong shares were oversold," said Alex Wong, director at Ample Finance Group.

"We'll probably have more improvements, but I don't see a big upside. People won't be too aggressive before the (US Federal Reserve) meeting this month."

Stocks that took harsh beatings this week found toeholds.

HSBC Holdings plc, Europe's top bank, recouped 3.5 percent to HK$119, reversing six straight days of losses.

HKEx gained 4.4 percent to HK$179.50.

Wireless operator China Mobile, the day's most active stock, rose 3.4 percent to HK$122.5.

China Life shot up 6.1 percent to HK$35.5. Europe-focused apparel retailer Esprit Holdings was the top performing blue chip, ending up 9.7 percent at HK$95.1.

But mainland food producers tumbled, a day after Beijing officially began to temporarily intervene in the market to curb price rises.

Milk processor China Mengniu Dairy Co Ltd tumbled 8.5 percent to HK$22.70 in heavy trade.

Uni-President China Holdings Ltd plunged 12.2 percent to HK$4.82.

Agencies

(China Daily 01/18/2008 page15)