Top Hong Kong shares ended higher for the seventh straight session on Tuesday as investors switched into property counters such as Wharf Holdings and away from pricey China plays on expectations of improved local economic growth.
Traders said China's confirmation of its first Sars case this year had little impact on the market and would not trigger selling pressure if it remained an isolated case.
The benchmark Hang Seng Index narrowed opening gains, ending 0.24 percent, or 30.99 points higher at 13,036.32. Excluding December 16 last year, turnover was the highest since February 2000 with HK $28.5 billion (US $3.65 billion) changing hands compared to the 20-day moving average of HK $17.24 billion.
Chinese firms listed in Hong Kong that derive the bulk of their earnings from China, known as H shares, drew selling after a placement by Aluminium Corp of China (Chalco) rattled sentiment.
The H-share index fell 3.87 percent, or 208.42 points, to 5,182.86 after more than doubling in value last year.
Traders said blue chips once again returned to the fore of rotational buying as investors took the view that many China plays are overbought and turned to domestic counters on local economy hopes.
"The property rally is not yet over. Property investment shares could be the next round of rotational buying," said Joseph Lau, a director at Tai Fook Asset Management, adding that telecom and technology shares would also emerge as buying targets.
Investors expect Hong Kong Chief Executive Tung Chee-hwa to announce a resumption of government land sales in his annual policy address on Wednesday but only on a limited basis.
This should avoid putting too much new supply in the market, which could stall the sector's nascent recovery.
Ports-to-property conglomerate Wharf Holdings jumped 4.77 percent to HK $23.05 while leading developer Sun Hung Kai Properties Ltd climbed 2.14 percent to HK $71.75.
Investors also snapped up local banking shares on expectations that a stabilised property market could reduce bad loans. The long-awaited bail-out of China banks had little impact on Hong Kong's financial stocks, traders said.
Bank of East Asia Ltd gained 2.68 percent to HK $24.9.
China has injected $45 billion from its foreign exchange reserves into Bank of China and China Construction Bank.
Global fashion retailer Esprit Holdings Ltd, which derives the bulk of its earnings in euros, jumped 5.02 percent to HK $27.20 on hopes the firm's earnings could be boosted after the dollar skidded to fresh lows against the euro.
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