HK stocks rise for 7th straight day

HONG KONG, May 8 (Xinhua) -- Gains in Chinese banks more than offset drops in property developers Friday, pushing the Hong Kong market higher for a seventh consecutive session.

The benchmark Hang Seng Index rose 171.98 points, or 1.0 percent, to finish at 17,389.87 after it bounced back from a low of 16,970.20 in the morning session. It was the index's highest close since Oct. 3, when it settled at 17,682. It rose 12 percent over the past week.

Turnover fell to 86.77 billion HK dollars (11.21 billion U.S. dollars) from Thursday's 95.21 billion HK dollars (12.30 billion U. S. dollars).

Analysts said the recent rally seems to have been overdone amid abundant liquidity and optimism about a global economic recovery.

Hong Kong Monetary Authority Chief Executive Joseph Yam urged investors to remain cautious, saying recent rallies by stocks and other assets don't imply an improvement in Hong Kong's economic fundamentals. "The local economy remains difficult and is still contracting," Yam told reporters Friday. "I would advise investors to understand the situation and to manage your risks well."

China Construction Bank rose 5.2 percent to 5.25 HK dollars on reports China Investment Corp., Singapore's Temasek Holdings Pte. and Bank of China Ltd. may scoop up part of Bank of America Corp.'s 16.7 percent stake in the Chinese lender.

China Merchants Bank surged 8.1 percent to 17.02 HK dollars on speculation it will be picked later Friday to join the Hang Seng Index.

Shoe maker Yue Yuen, tipped to be taken out of the Hang Seng Index, dropped 1.3 percent to 17.26 HK dollars.

Hong Kong Exchanges and Clearing, the local bourse operator, jumped 4.8 percent to 118.30 HK dollars on strong turnover. The stock market operator is now up 37 percent since May 1, riding the market's rally.

Property developers fell following their recent advance, with Cheung Kong, Sun Hung Kai Properties and Henderson Land continuing to fall for the second consecutive day.

The finance sub-index went up 343.60 points or 1.34 percent to 25,983.64.

The properties sub-index fell 190.00 points or 0.87 percent at 21,672.69.

The commerce and industry sub-index went up 107.44 points or 1.14 percent to 9,506.09.

The utilities sub-index fell 66.60 points or 0.19 percent at 35,284.48. (7.742 HK dollars = 1 U.S. dollar)

Special Report: Global Financial Crisis