Hong Kong blue chips finished up 1.16 percent at fresh 5-1/2 year highs on Wednesday, as property issues rode fading interest rate worries to 8-1/2-year highs and record metals prices boosted commodity companies.
Turnover was HK$47.7 billion (US $6.1 billion), the second most active mainboard trading day ever, according to exchange officials, and up 34 percent from Wednesday's HK$35.5 billion. "The market is crazy," said Andrew To, sales director at Tai Fook Securities. "I don't rule out a short-term correction."
"We need another group of heavyweights that can push the market even higher. HSBC, China Mobile appear to be tired after rallying in the last few days."
The benchmark Hang Seng index ended up 192.91 points at 16,830.44, marking its third straight session of gains.
The Hang Seng property sub-index rose 2.6 percent, its biggest one-day percentage gain in more than three months to end at 20,769.05, a level unseen since October 1997.
The China Enterprises index of H shares, or Hong Kong-listed shares in mainland companies, gained 1.4 percent to 7,123.03 on the back of robust commodity prices.
The market is overbought, technical indicators show. The Hang Seng index's 14-day relative strength index (RSI) stood at 78.8. The market views an RSI of 70 or above as overbought. But some analysts said the market could test higher in coming months.
"It's not a big resistance level at 17,000," said Kingston Lin, associate director at Prudential Brokerage, adding that the market could rise to the 18,000 mark before July.
Property shares accelerated after minutes from the most recent Federal Reserve policy meeting suggested the US central bank could soon stop raising interest rates. Blue chip developer Sun Hung Kai Properties Ltd, which had earlier tapped five-year highs, advanced 4.2 percent to HK$85.3.
Wheelock and Co Ltd rose 4.3 percent to HK$14.60 and Wharf Holdings Ltd jumped 7 percent to HK$31.5 after Wharf said it and parent Wheelock were pondering the listing of a real estate investment trust (REIT). Both Wharf and Wheelock had earlier tapped highs not seen since 1997.
Resource-related stocks led the H-shares higher as Jiangxi Copper Co Ltd tracked surging metal prices. China's top copper producer finished at HK$8.05, a 3.2 percent gain. Zijin Mining Group Co Ltd jumped 5.75 percent to HK$4.6 as gold prices hit 25-year highs.
High oil prices boosted energy companies, with producer CNOOC Ltd gaining 2.3 percent and PetroChina jumping 3.4 percent.
Among the day's losers was mainland automaker Denway Motors Ltd, which fell 3.6 percent to HK$3.4 after saying its 2005 earnings fell 7.6 percent as its profit margins were squeezed by higher material costs and lower vehicle prices.
China Shipping Container Lines Co Ltd also took a hit, shedding 9.6 percent to HK$2.6 after reporting 2005 earnings declined 11 percent year-on-year.
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