Hong Kong blue chips edged up in sluggish trade yesterday, led by heavily weighted Hutchison Whampoa and China Mobile, which offset pressure from airline and oil refinery stocks as oil prices stuck near record levels.

"The market was consolidating as investors did not have sufficient confidence that stocks would continue to go up after recent gains," said Patrick Yiu, an associate director with CASH Asset Management.

"The underlying sentiment was not bad, and investors were waiting for an excuse to buy instead of taking chances to sell," Yiu added. The benchmark Hang Seng Index closed up 0.3 percent, or 78.18 points, at 26,262.13, led by a 3.32 percent gain in ports-to-telecoms conglomerate Hutchison and a 1.41 percent rise in China Mobile.

Sinopec fell 2.18 percent, however, after oil prices hit a record above $120 a barrel.

Airlines also fell with Air China losing 3.21 percent to HK$6.33, China Eastern down 1.55 percent at HK$3.80, China Southern falling 3.16 percent to HK$5.52 and Cathay Pacific easing 1.29 percent to HK$16.84.

Despite softer mainland stock markets, the China Enterprises Index of Hong Kong-listed mainland companies, or H- shares, edged up 0.18 percent, or 26.01 points, to end at 14,651.29. Mainboard turnover fell to HK$69.74 billion from HK$74.03 billion on Monday.

PetroChina edged up 0.17 percent to HK$12.12 despite Goldman Sachs downgrading the firm to "sell" from "buy" on widening refining losses as oil prices surge. Nine Dragons Paper soared 9.23 percent to HK$9.94 after China's largest paper board producer said it would invest US$22.8 million in a 60 percent stake in a paper production firm in Vietnam.

Shares of Mongolia Energy soared 7.93 percent to HK$11.16 after it said it would expand its concession areas in Western Mongolia for coal, ferrous and non-ferrous resources to about 329,008 hectares from 66,000 hectares.

Angang Steel, which rose 4 percent on Monday after the Financial Times reported that it had held informal talks with the world's biggest steel producer ArcelorMittal on a cooperation deal, continued to shine with its shares gaining a further 2.72 percent to HK$20.80.

Reuters

(HK Edition 05/07/2008 page2)