Hong Kong shares end morning higher on bargain-hunting; trade cautious UPDATE
Share prices finished the morning higher, recovering from early weakness driven by Wall Street, as bargain-hunters picked up select blue chips following falls over the last four sessions.
Large-caps HSBC, China Life and ICBC supported the key index, while property counters Sun Hung Kai and Wharf Holdings also rebounded.
Dealers noted that the market's upside was capped due to continuing worries over the US economy which is facing inflation pressure even amid flagging growth.
Investors are also expecting China to announce new measures to address its own inflation problem.
Pacific Online, a China-based information technology firm, fell nearly 7 pct from its initial public offering (IPO) price on its trading debut.
The Hang Seng index ended the morning up 113.88 points or 0.43 pct at 26, 710.46, off a low of 26,093.96 and high of 26,912.29.
Turnover was 63.70 bln hkd.
""The market reversed early losses on bargain-hunting in select blue chips and property stocks, but the upside momentum was not very strong as investors were still cautious after (steep) losses in the last four sessions,"" said Matthew Kwok, research head at Tanrich Securities.
He noted that investors picked up select blue chips, including HSBC and China Life, which fell sharply in recent days.
Kwok said investor confidence is still weak and there is no aggressive buying although many stocks have fallen to attractive levels.
""Investors will stay sidelined and take leads from the US market and US economic data due this week,"" he said.
He said he expects the index to find support at the 26,000-point level, although subprime concerns and a slowing US economy will continue to weigh on sentiment.
Among major blue chips, HSBC gained 1.50 hkd or 1.15 pct at 132.30, China Life was up 0.4 hkd or 1.03 pct at 39.4, ICBC was up 0.08 hkd or 1.45 pct at 5.58.
Hong Kong Exchanges and Clearing was down 0.2 hkd or 0.09 pct at 218.20 and China Mobile fell 0.10 hkd or 0.07 pct to 133.30, while Hutchison Whampoa was up 0.90 hkd or 1.04 pct at 87.70.
Some property stocks rebounded from early falls, with the sectoral sub-index gaining 59.84 points or 0.17 pct to 34,560.4.
Sun Hung Kai was up 2.8 hkd or 1.88 pct at 151.7 and Wharf was up 0.35 hkd o 0.89 pct at 39.55.
Cheung Kong was down 0.80 hkd or 0.61 pct at 131.10, Sino Land fell 0.25 hkd or 1.0 pct to 24.8, New World Development was down 0.4 hkd or 1.53 pct lower at 25.7 and Henderson Land fell 1.25 hkd or 1.85 pct to 66.25.
Local banks were mostly higher, with Bank of East Asia up 0.10 hkd or 0. 21 pct at 47.15 and BOC Hong Kong up 0.2 hkd or 0.99 pct at 20.35, while Hang Seng Bank was down 1.6 hkd or 1.1 pct at 144.5,.
The financial sub-index gained 257.15 points or 0.67 pct at 38,897.65.
Li & Fung rose 0.05 hkd or 0.17 pct to 29.8 after CLSA kept an ""outperform"" call on the stock, citing positive earnings and business outlook.
Utility stocks were higher, with Hong Kong & China Gas up 0.8 hkd or 3.7 pct at 22.4, Hongkong Electric surging 2.35 hkd or 5.92 pct to 42.05 and CLP up 0.5 hkd or 0.95 pct at 53.3.
The government will announce a decision on tariff increase after the city's two power companies -- Hongkong Electric and CLP -- deliver their annual tariff report at a Legislative Council panel meeting on Friday.
China properties were mixed, with Agile Property rising 0.08 hkd or 0.61 pct to 13.0, Guangzhou R&F Property up 1.35 hkd or 5.38 pct at 26.45 and Beijing Capital Land down 0.13 hkd or 2.67 pct at 4.74.
China financials were also mixed, with China Construction Bank up 0.03 hkd or 0.46 pct at 6.6, Bank of Communications up 0.08 hkd or 0.74 pct at 10. 88, Bank of China flat at 3.82 hkd, Ping An Insurance down 1.05 hkd or 1.32 pct at 78.35 and China Merchants Bank down 0.15 hkd or 0.48 pct at 31.25.
The Hang Seng China Enterprises index was up 15.01 points or 0.10 pct at 15,406.4.
Air China, the mainland's biggest international carrier, fell 0.41 hkd or 4.31 pct to 9.10 after news that its shareholders approved a plan for the company to issue 400 million additional A-shares in Shanghai within 12 months.
Part of the share sale proceeds are to be used to acquire 15 Boeing 787s, 24 Airbus 320-series and 15 Boeing 737-series aircraft, the company said.
Chalco was down 0.34 hkd or 2.18 pct at 15.28 despite news that it raised its spot alumina price by 10.53 pct.
New listing Pacific Online closed the morning at 3.07 hkd, down 6.97 pct from IPO price of 3.3. It opened at the IPO price and moved in the range of 3. 43 to 3.02 hkd.
The company raised net proceeds of 576.4 mln hkd from the issue of 285 mln shares. The retail tranche of the IPO was 10.2 times oversubscribed.
China Coal was higher after CLSA predicted that the sector will continue to outperform as the industry will be unaffected by a slowdown in the US economy.
China Coal was up 0.30 hkd or 1.39 pct at 21.85, but China Shenhua was down 0.45 hkd or 1.01 pct at 44.3.
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