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March 2, 2010

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HK shares finish at highest in 5 weeks

SHARES in Hong Kong ended at their highest in five weeks yesterday, led by Chinese mainland financial stocks on hopes China's loose monetary policy will stay in place, while mining shares surged as copper prices leapt after a massive quake hit top producer Chile.

The key Hang Seng Index ended up 2.17 percent, or 448.23 points, at 21,056.93, its highest close since January 20.

"Strong resistance was noted at above the 21,000 level as investors were looking to lock in gains rather than betting on a further rise," said Daniel Chan, senior investment strategist from DBS Bank. "The market was focusing on HSBC earnings for hints about the health of the bank as well as its other rivals."

HSBC gained 0.93 percent to end at HK$86.65 (US$11.16), its highest close in more than five weeks, before it announced its results. The bank said after the local market close that its underlying pre-tax profit was up US$4.7 billion for 2009, or 56 percent, at US$13.3 billion.

Its unit Hang Seng Bank rose 1.2 percent to its highest close in about six weeks. The bank reported a 6.2 percent drop in 2009 profit to HK$13.22 billion, against consensus forecast of HK$13.29 billion.

Investors snapped up mainland bank shares on expectations that the National People's Congress meeting, to be held later this week, might reaffirm an appropriately loose monetary policy despite recent official liquidity tightening steps, brokers said.

Top lender ICBC rose 5.1 percent to end at a one-month closing high. China Construction Bank, the country's second-largest bank by assets, rose 4.1 percent.


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