Declines overdone, say HK traders

By Hanny Wan  |   2008-6-26  |     NEWSPAPER EDITION

HONG Kong stocks rose, lifting the benchmark index from a three-month low, as investors speculated recent declines were overdone.

Trading was limited to the afternoon session due to a storm warning, Bloomberg News reported. China Netcom Group Corp climbed the most in a week. China Construction Bank Corp led gains among the nation's financial shares after a central bank survey showed expectations have eased about interest rate increases.

China Life Insurance Co, the country's largest insurer, advanced after the China Securities Journal said the company had been snapping up "large quantities" in mutual funds.

"We don't see the need for further tightening measures" by the Chinese government, said Henry Chan, Hong Kong-based head of Asian investments at Baring Asset Management (Asia) Ltd, which manages more than US$10 billion of equities.

The Hang Seng Index added 179.14, or 0.8 percent, to close at 22,635.16, halting a four-day, 3.7 percent drop that pushed the measure to its lowest close since March 20 yesterday.

The Hang Seng China Enterprises Index, which tracks so-called H shares of mainland companies, rose 1.5 percent to 12,196.25.