Hong Kong stocks end morning near session high
HONG KONG, June 30 (Reuters) - Hong Kong stocks closed the Tuesday morning session sharply higher following a rally of shares in Tokyo fuelled by a recovery in the yen, brokers said.
The Hang Seng Index was up 120.47 points, or 1.42 percent, to 8,581.18, slightly off its high of 8,608.27 hit earlier.
''The market just followed the Japanese stocks higher and the yen is also steadier,'' said Alan Pau, associate director at South China Securities.
The Nikkei 225 average rose 332 poins, or 2.16 percent, to 15,698 in afternoon trade in Tokyo after the yen recovered to 140.40/50 to the U.S. dollar from more than 142 per dollar earlier.
''The upside of the market is seen limited today with profit-taking expected to cap the Hang Seng's gain at 100 to 200 points but there is also no negative news to drag share prices down,'' Pau said.
Trading was thin ahead of a public holiday on Wednesday when Hong Kong celebrates the anniversary of its return to China on July 1. Turnover was only HK$2.09 billion compared to HK$3.47 billion at Monday's midsession.
''There is a lot of index futures trading today but I think the volume (in the cash market) is very thin,'' said Robert Sessoom, head of research at SG Securities.
July index futures soared 210 points to 8,600 and the September index added 115 points at 8,555 at the midday close.
But some brokers said the overall sentiment improved amid U.S. President Bill Clinton's nine-day China visit, which was seen possibly refocusing foreign investors' attention on China.
Clinton said in Shanghai that Asia's economic growth depended on Japan. ''We cannot see growth restored in Asia until it is restored in Japan,'' he said.
Clinton visits Hong Kong on July 2 and will return to Washington on July 3.
Brokers said the Hong Kong Mortgage Corp's move to relax some of its criteria for buying bank loans should help to stabilise the local property market.
The adjustments would allow the HKMC to buy primary mortgage loans that have a co-financing arrangement with property developers, a spokeswoman for the corporation said.
They would also see the HKMC buy mortgage loans that have a re-financing arrangement.
Banks led the midsession rally with HSBC Holdings (0005.HK) rising HK$4.50 points to HK$189.50.
Property stocks were mostly firmer. Cheung Kong (0001.HK) added HK$1.00 to HK$38.80 and Sun Hung Kai Properties (0016.HK) rose HK$0.60 to HK$33.50.
But Hong Kong Telecom (0008.HK) eased HK$0.15 to HK$14.60 on selling related to over-the-counter options, Pau said.
Hong Kong's Telecommunications Authority (TA) said on Monday it imposed a penalty of HK$20,000 on Hong Kong Telecommunications Ltd (Hongkong Telecom) for breaching a TA directive issued on April 1.
Fairwood Holdings (0052.HK) eased HK$0.067, or 30.45 percent, to HK$0.153. The company reported a net loss of HK$60.36 milllion for the year ended March 31, 1998 compared with a loss of HK$122.83 million the previous year.
Red chips underperformed the market and the Hang Seng China-Affiliated Corporations Index rose 4.41 points, or 0.46 percent, to 955.64.
The Hang Seng Chinese Enterprises Index of H-shares bucked the trend falling 4.69 points, or 1.07 percent, to 432.03.
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