Hong Kong stocks ended fractionally higher on Friday after index heavyweight HSBC recouped earlier losses to end unchanged and on hopes that China plays could benefit from institutional investment from the mainland.
Global bank HSBC , the largest constituent stock in the Hang Seng Index, sagged earlier on selling ahead of the settlement of index futures contracts next week but closed flat at HK $116.50.
The blue chip index finished 0.18 percent higher, or 21.84 points, at 12,185.52. The Hang Seng China Enterprise Index, which groups Chinese stocks listed in Hong Kong or H-shares, advanced 0.84 percent to 4,223.56.
The Hang Seng climbed 2.78 percent in the week, but is still 3.1 percent down from the end of 2003.
"Sentiment is quite positive at the moment. My guess is the (Hang Seng) index could ride higher to 12,250 next week despite some bumps along the way," said Alfred Chan, chief dealer at Cheer Pearl Investment.
Market watchers said the H-share index may blaze higher to the 4,400-point levels in the short term on QDII hopes but the 4,500 mark may prove to be a strong resistance point.
However, in the property sector, worries about a widely-expected US interest rate rise next week lopped 0.60 percent off the Hang Seng property sub index with the city's largest developer Sun Hung Kai Properties losing 0.4 percent to HK $63.00.
Other losers included Cheung Kong, Sino Land and Hysan Development, with losses ranging from 0.44 percent to 1.76 percent.
H-shares such as logistics firm Sinotrans and cargo handler China Shipping Development were 6.73 percent and 5.36 percent higher respectively, amid talks that China may implement the Qualified Domestic Institutional Investor scheme before July 1.
China auto stocks were broadly higher but Denway Motors surrendered earlier gains to end unchanged despite a report by Goldman Sachs retaining its 'outperform' rating on the stock with a forecast of 77 percent sales volume growth year-on-year for 2004.
Goldman said in a research note on Friday that a visit to a General Motors' plant in Shanghai confirmed its view that sales of strong branded vehicles appeared robust in the first two weeks of June compared to weak figures in May.
Investors snapped up China shares on Thursday on news that mainland insurers might soon be allowed to invest overseas, meaning some $8 billion could flow into markets, such as Hong Kong.
The official Shanghai Securities News also said on Friday that China Life Insurance has applied for a licence to invest in overseas securities markets, making it possibly one of the first Chinese insurers to be allowed to do so under the Qualified Domestic Institutional Investor scheme.