Hong Kong shares close higher led by China stocks

Mar. 6, 2008

HONG KONG (XFN-ASIA) - Share prices closed higher led by China stocks following a rebound in Shanghai, with commodities, financials and telecom counters in focus.

Commodity stocks surged after oil and gold prices hit new highs amid the US dollar's weakness, while China banks and insurance firms tracked A-share gains on the mainland.

China telecom stocks extended yesterday's gains after mainland media quoted a Chinese official as saying that the long-awaited sector restructuring could take place in the first half of 2008.

Strong earnings from local blue chips and a positive Wall Street showing also helped the local bourse snap a four-session losing streak, but dealers noted that the index came off the day's highs due to talk that China may raise interest rates.

Ping An Insurance was up 4.6 pct after shareholders approved the company's fund-raising plan, while shipping firm China COSCO surged over 5 pct on hopes of an asset injection by its parent.

The Hang Seng index closed up 228.39 points or 0.99 pct at 23,342.73, off a low of 23,254.31 and high of 23,615.18.

Turnover was low at 69.55 bln hkd.

'While the market ended up today, it's worth noting the continuing drop in turnover and the index's fall in the afternoon session from a 500-point gain at morning close,' said Linus Yip, strategist at First Shanghai Securities.

'Many investors were unwilling to trade and this was amply reflected by the low turnover as they continue to fret about global market uncertainties,' he said.

'Sentiment was also weighed down by rumors that China might raise interest rates in its bid to curb rising inflation,' Yip said.