Friday, January 19 4:55 PM SGT HK Shares End At 3-Month High On Better Nasdaq Sentiment
HONG KONG (Dow Jones)--Hong Kong shares rose to a three-month high Friday as improving sentiment on the Nasdaq market sparked a wave of buying in local telecommunications and technology stocks, traders said.
The benchmark Hang Seng Index jumped 2.6%, or 404.80 points, to 15933.55, the highest close since Oct. 5, when the blue-chip gauge closed at 16184.68. The index traded the session in a region of 15682.35 to 15964.93.
The broader All Ordinaries Index rose 2.4% to 6417.26. Trading volume surged by 60% to HK$14.72 billion, from HK$9.23 billion Thursday.
On the week, the Hang Seng Index climbed 4.2%.
A slew of positive earnings reports from U.S. technology and Internet companies was behind Friday's rally, market watchers said.
The Nasdaq Composite Index added 3.2% to 2768.49 overnight, bolstered by news that International Business Machines' fourth-quarter earnings exceeded analysts' projections.
Blue-chip mainland computer maker Legend gained 12%, or 75 HK cents, to HK$6.85, It was the biggest blue-chip gainer.
Telecommunications stocks also rose on market talk that Pacific Century CyberWorks is actively looking for a buyer for a stake in the company that London's Cable & Wireless is allowed to sell next month. Worries about the share sale - which could further depress CyberWorks' share price - has plagued performance of its shares.
CyberWorks ended up for the second day in a row, at HK$4.625, up 8.8%, or 37.5 HK cents.
"PCCW has been on a freefall for a long time and hasn't had any real rebound. Investors who have shorted the stock are rushing to cover their positions," said Sunny Chan, head of research with KGI Asia.
Hutchison Whampoa rose 5.1%, or HK$5, to HK$104. The company said that it won't bid for Australia's Cable & Wireless Optus, relieving the market of the worry that Hutchison would shoulder an extra financial burden if it bought the asset.
China Mobile was up 4.2% to HK$49.40. Competitor China Unicom, which reported threefold increase in mobile subscribers last year, rose 4.7% to HK$13.30.
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Smaller Telecoms, Internet Stocks Soar
Joining the list of advancers Friday were smaller telecommunications stocks because the market finally came to recognize their attractive valuations, traders said. Mobile operator SmarTone was up 10% to HK$13.70. Peer Sunday Communications rose 11% to 69 HK cents. Credit Suisse First Boston earlier this week said it has buy recommendations on both stocks.
Traders added that SmarTone, which this week raised mobile charges for a promotional package, also fueled hopes that a cutthroat price competition in Hong Kong's wireless market may see an end.
Internet stocks rose after tycoon Li Ka-shing's Internet portal Tom.com said its fourth-quarter losses narrowed by more than half to HK$78.3 million from previous quarter.
Tom.com gained 23% to HK$2.50. Sunevision rose 20% to HK$2.95. The Growth Enterprise Market index, which tracks performance of these high-technology companies, rose 6.1%.
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