Hong Kong shares closed up 1.94 percent yesterday as the market started to rebound from a four-day losing streak.

Sinopec, Asia's largest refiner, jumped 3.4 percent as oil prices dipped below $135 per barrel and after Beijing reiterated its commitment to reform the State-set energy-price policy.

China Mobile, the day's most heavily traded stock, helped shore up gains on the main index with a 2.4 percent gain.

The stock had given up nearly 9 percent during last week's slump.

But the benchmark index closed off its highs as mainland stocks trimmed gains in the afternoon and investors turned cautious ahead of a slew of economic data and corporate results.

"Investors are being careful ahead of the earnings announcements from major US banks and the release of key data, including housing starts and the producer price index. The volatility in oil prices has also put investors on their guard," said Conita Hung, head of equity markets for Delta Asia Securities.

The Hang Seng Index closed up 437.39 points at 23,029.69 after rallying to 23,232.99 earlier in the day.

The index lost 7.4 percent - its biggest weekly drop since March 7 - in reaction to Beijing's harsher-than-expected bank-reserve-requirement hike.

Mainboard turnover was low at HK$56.68 billion, compared with the already low HK$59.07 billion on Friday.

The China Enterprises Index of top locally listed mainland stocks jumped 2.8 percent after leading losses last week.

Mainland financials, which had been mauled by Beijing's reserve-requirement hike last week, tracked Shanghai gains.

Mainland property firms surged after analysts said housing prices rose 9.2 percent in May, compared with last year, despite the devastating earthquake in Sichuan.

Reuters

(China Daily 06/17/2008 page2)