Getcher and IQ.......An interesting play buying HongKong and Japan Index Funds EWH and EWJ specially in view of the foll news: HONG KONG, Nov 17 (Reuters) - Hong Kong stocks stormed to a sharply higher midsession close on Monday, spurred ahead by an easing of interbank rates and a surge in Tokyo stock prices.
The Hang Seng Index closed the morning up 518.57 points, or 5.21 percent, at 10,475.90 after hitting a session high of 10,512.41. Turnover was HK$7.05 billion compared with HK$6.96 billion at midday on Friday.
"The overall theme is lower interest rates," said Geoff Galbraith, institutional sales trader at NAVA SC Securities.
Hong Kong interbank rates softened, with three-month HIBOR at 10.5 percent by late morning versus 10.9 percent on Friday.
"It looks like temporarily the prime rate will not be raised," said Alex Wong, research manager at OSK Asia Securities, adding he saw more upside for the market.
"The technical picture is still pretty good and it looks like Asian currency markets temporarily have stabilised."
Tokyo share prices also staged a strong rally on Monday with the 225-share Nikkei average up 1,060 points, or 7.03 percent, at a session high of 16,142 in the afternoon.
Analysts said the Hang Seng Index was likely to see more gains in the near term.
"The index has reached above the 10-day moving average which was around 10,150 points, so usually if it goes above that level it means that the index has further upside to go," Wong said.
He said the index could bounce to 10,800 points in the short term.
"Gradually people are coming back to the market," Galbraith said. "The higher it goes the more people come back into the market. They like to buy when there is more of a trend."
But he expected to see profit-taking above 11,000 points.
Property and banking stocks were the main beneficiaries of the decline in interbank rates.
The red chip Hang Seng China-Affiliated Corporations Index ended the morning up 62.79 points, or 3.14 percent, at 2,063.65 and the H-share index rose 14.87 points, or 1.72 percent, to 879.00.
November Hang Seng Index futures rose 535 points to 10,445 and the December contract gained 530 points to 10,500.
Jennifer Genevieve (852) 2843 6345; Fax (852) 2845 0636 REUTERS
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