Hong Kong share prices closed 2.06 percent higher on Tuesday as bargain-hunting snapped a four-day losing streak, with sentiment boosted by a rally on Wall Street. The benchmark Hang Seng Index finished 424.76 points up at 21,013.17. Turnover was 49.49 billion Hong Kong dollars (6.39 billion US). However, analysts said weak demand for shares on the mainland due to a heavy IPO schedule will weigh on the market after the National Day holiday, which starts from Thursday and ends on October 8.
"Consolidation may return shortly after the National Day holiday, as the current rebound was likely helped by futures-led buying interest ahead of expiry (of September contracts) today and some window-dressing ... ahead of the end of the quarter," Tanrich Securities investment manager Jackson Wong said. A report by banking group CIMB said liquidity into emerging markets in Asia pulled back sharply in August, ending several months of strong flows that had driven a rebound in asset prices. "As we draw closer to the end of 2009, the flow of funds is likely to be more muted as the euphoria over the market recovery dissipates and market valuations become more demanding," CIMB said. HSBC and Chinese lenders helped drive Tuesday's gains.
HSBC closed 2.6 percent higher at 89.40 on investor optimism over news that its chief executive would relocate to Hong Kong from London in February. ICBC ended 3.3 percent higher at 5.94, Bank of China rose 2.2 percent to 4.12 and Bank of Communications closed 2.0 percent up at 9.57. Mainland developers recovered after falling Monday. Agile Property rose 1.7 percent to 2.83 and China Overseas Land rose 1.8 percent to 16.56.
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