Hong Kong stocks ended flat on Monday as investors took a breather ahead of 2005 earnings results from HSBC Holdings Plc, which accounts for nearly a third of the benchmark Hang Seng index weighting.
The Hang Seng index edged up 0.06 percent to 15,811.83 on turnover of HK$28 billion (US $3.6 billion), down from Friday's HK$37.7 billion.
Shortly after the market closed, Hong Kong's top lender, HSBC, said its 2005 profits rose 11 percent to $21 billion. The figure was above the average forecast of $20.97 billion by 13 analysts and a record profit for a British bank. "The bottom line is that HSBC's results are better than expected," said Kenny Tang, associate director at Tung Tai Securities.
"It should help the blue chips a bit, but not substantially, since the 16,000 resistance level will remain heavy," Tang said.
HSBC ended the day at HK$132.30, up 0.15 percent.
Property shares fell, with the Hang Seng property sub-index slipping 0.76 percent to 19,412.14, as investors brace for possible rate increases.
Falling US Treasury debt prices have sent benchmark yields to one-year highs, fast approaching levels not seen since June 2004, when the Federal Reserve started raising US interest rates. "The long-term yield has edged higher, which leads to an anticipation of a rate hike," said Alex Tang, research director at Core Pacific-Yamaichi International (Hong Kong) Ltd.
"And if rates continue to head north, the property counters could be hard hit."
Hong Kong-listed mainland firms, or H-shares, were firm. The China Enterprises index climbed 0.36 percent to 6,568.87. Metals shined, with rising gold prices boosting the shares of Jiangxi Copper Co Ltd, which surged 8 percent to a record closing high of HK$5.40
China's top copper producer is expected to benefit from firming gold and copper prices, since gold is a by-product of copper production. Gold miner Zijing Mining Group Co Ltd jumped 3.55 percent to HK$5.10.
Separately, Esprit Holdings Ltd recovered from a recent sell-off in its stock after the global retailer said in late February that it faced slowing comparative store sales growth. Esprit gained 2.05 percent to HK$59.85.
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