HONG KONG: In the second trading day of the year, Hong Kong stocks soared by over 2 percent to reach a one-month high yesterday, led by a rally in energy and metal shares amid soaring commodities prices.

The benchmark Hang Seng Index yesterday rose 456.3 points to 22,279.58, its biggest percentage gain in five weeks.

Mainboard turnover surged to HK$82.97 billion, the highest volume since November 27 last year, from HK$48.51 billion on Monday.

Analysts said satisfactory manufacturing data from the United States and the mainland have helped to boost the benchmark index and trade volume.

However, they expect the picture is not so rosy in the longer term.

"Investors now worry that central banks around the world may withdraw their massive economic stimulus packages in this year, which may trigger fluctuations in the local stock market," said Peter Lai, director at DBS Vickers.

Lai expects the Hang Seng Index to become even more volatile in 2010, as the loose fiscal measures may not support the benchmark index for long.

"The benchmark index may jump further early this year. However, it may encounter pressure to retrace after reaching 25,000," Lai added.

Commodity and oil producers gained the most on the Hong Kong bourse yesterday, driven by the surge in metal and crude prices.

Zijin Mining Group, the country's largest gold producer, soared 11.19 percent, or HK$0.83, to end at HK$8.25, while Aluminum Corporation of China, the largest aluminum producer on the mainland, also jumped 9.08 percent, or HK$0.79, to HK$9.49.

PetroChina, the biggest oil company in the country, gained 5.92 percent, or HK$0.55, to close at HK$9.84, while China National Offshore Oil Corporation (CNOOC) advanced 5.72 percent, or HK$0.70, to HK$12.94.

Castor Pang, research director of CINDA International Holdings, said shares in energy and commodity sectors may further advance this year, as commodity prices may continue to jump amid the weakening US dollar.

"The commodity sector may outperform the local market to soar more than 15 percent in 2010," Pang said.

The China Enterprises Index, which tracks the top locally-listed mainland stocks, yesterday advanced 3.1 percent to 13,142.03.

Goldman Sachs Group forecasts a rally in mainland shares in the first quarter of 2010, benefiting from favorable government policy and liquidity.

The US-based investment bank also expects earnings growth to boost the China Enterprises Index to 16,800 in the foreseeable future.

Bank of China yesterday leaped 2.61 percent, or HK$0.11, to HK$4.32, while China Construction Bank also rose 2.43 percent, or HK$0.16, to HK$6.75.

(HK Edition 01/06/2010 page4)