Hong Kong blue chips ended slightly lower on Tuesday, after closing at their highest level in nearly six weeks in the previous session following the long Lunar New Year holiday. Investors were cautious as they awaited testimony by US Federal Reserve Chairman Alan Greenspan to committees of the Senate and the US House of Representatives on Wednesday and Thursday, which may give clues on the pace of further US rate hikes and the central banker's outlook on the US economy.
The blue chip Hang Seng Index fell 0.15 percent, or 21.4 points, to 13,995.83. Turnover was light at HK$15.4 billion (US $2 billion), compared to HK$19.1 billion on Monday.
"Investors are staying on the sidelines until they hear what Greenspan has to say," said Y.K. Chan, strategist at Phillip Securities.
Hong Kong banks, which traditionally follow the Fed's moves, have not matched most recent US rate hikes because the local banking system has been awash with cash.
However, investors worry that if local banks continue to shrug off US rate increases, then this may trigger a greater outflow of funds in search of higher yields.
"There is always this worry, but for the moment the fund situation is quite favourable," said Alex Wong, asset management director at Rexcapital Asset Management.
Asia-focused bank Standard Chartered Plc, which is expected to post a sharp rise in 2004 profit on Wednesday, ended 0.67 percent higher at HK$149.50 after gaining 2.77 percent on Monday.
Oil and gas producers like CNOOC Ltd and PetroChina Ltd extended their rise, driven by a bullish outlook for oil prices.
CNOOC shares rose 1.83 percent to HK$4.175 while PetroChina added 1.09 percent to HK$4.625.
Yue Yuen Industrial (Holdings) Ltd, the world's largest athletic shoe maker, gained 1.48 percent to HK$20.60 after posting net consolidated operating revenue of US $264.10 million in January. It gave no comparison figures.
Property investment firm Sino Prosper Holdings Ltd extended Monday's 35.63 percent surge, after it said it was in talks to buy a stake in a firm that was granted rights to develop and manage a free economic zone in Mongolia. It ended up 2.99 percent at HK$0.345.
China's biggest listed telecoms equipment maker ZTE Corp gained 4.24 percent to HK$27.05 after MSCI said it would add ZTE to its Standard Index Series.
Separately, the company and France's Alcatel said they would co-operate in making CDMA mobile networks, adding another player to the already crowded market.
Beijing-backed ports and shipping containers group Cosco Pacific Ltd fell 4.9 percent to HK$16.50 after having gained as much as 8 percent in the last five trading sessions.
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