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Shares rise in HK on US rates decision

HONG Kong shares rose 2.1 percent yesterday as investors continued to cover short positions on financial counters, while property stocks surged after the United States Federal Reserve kept borrowing costs low.

Top developer Sun Hung Kai Properties rose 5 percent to HK$96.75 (US$12.48). Sun Hung Kai raised prices for apartments at its project in the new territories by 8 percent amid a strong market response, the Oriental Daily reported, citing the firm's Executive Director Victor Lui Ting.

Property conglomerate New World Development gained 7.6 percent, while Henderson Land advanced 6.2 percent.

Sinopec Corp underperformed, inching up 0.4 percent, as analysts deemed its parent's deal to buy Swiss oil explorer Addax Petroleum Corp for US$7.24 billion expensive and said it lowered the possibility of an asset injection into the listed company.

The offer price of C$52.80 (US$45.43) per share was close to the highs scaled by the stock in June last year, when crude oil was marching toward US$150 per barrel.

The benchmark Hang Seng Index was up 382.88 points at 18,275.03, with shares worth HK$60.2 billion changing hands compared with Wednesday's HK$56.7 billion.

"The Fed's decision to keep rates near zero encouraged investors to cover shorts in interest-rate-sensitive stocks," said Alex Tang, research director with Core Pacific-Yamaichi International. "But the weak turnover suggests investors still believe the market is overvalued."

The China Enterprises Index, which represents top locally listed Chinese mainland stocks, climbed 2.2 percent to 10,763.76.

Reports of strong new lending on the mainland continued to drive up mainland property and banking stocks, with China Overseas Land up 5.7 percent at HK$17.92, while the Bank of China rose 3.8 percent.


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