Hong Kong shares close morning off highs

Share prices closed the morning off their highs, lacking momentum to push the advance further after the Hang Seng index breached key resistance at 10,000 points, dealers said.

China Unicom came under profit taking, although underlying sentiment in the stock remains generally upbeat as investors are taking a positive view of its purchase of nine mobile networks from its parent, they said.

The Hang Seng Index was up 61.30 points at 10,032.45, off a high of 10,081.02 and a low of 9,989.79, on trade of 3.156 billion hkd.

The Hang Seng November contract was at 10,007 points.

Francis Lun, general manager of Fulbright Securities, said the Hang Seng Index was unable to advance much further after breaching 10,000 points.

"Underlying sentiment is positive but the market is consolidating at the current level, preparing for further gains," he said, noting that the benchmark index will remain rangebound at around 10,000-11,000 points in the afternoon.

The Hang Seng China Enterprise Index was up 1.99 points at 1,870.72, and the CAC Index was 11.80 points higher at 1,086.32. The GEM Index was up 0.40 points at 111.25 on trade of 44.642 million hkd.

China Unicom turned lower after initial gains, receiving little boost from the news of its purchase of nine mobile networks from its parent.

China Unicom closed the morning down 0.05 hkd at 5.70 on trade of 11.546 million shares.

"The deal has been widely expected by the market, although the price of the transaction is quite favourable for China Unicom," a dealer from a local brokerage said.

China Mobile was up 0.30 at 20.70 and China Telecom was up 0.01 at 1.46.

PCCW added 0.01 to 1.35 after announcing the layoff of 529 employees yesterday. Hutchison Whampoa was up 0.50 at 52.75.

HSBC was up 0.50 at 90.25. The bank has been fined 2.1 million euro by the Spanish government for holding 138 secret accounts in Spain.

Bank of East Asia was down 0.05 at 13.70 and BOC Hong Kong was down 0.05 at 8.25.

Within the property sector, Cheung Kong was up 0.75 at 56.50, Sun Hung Kai Properties was 0.25 higher at 54.00 and New World Development was down 0.025 at 4.70.

Shun Tak was a major feature in early trade, rising 0.29 hkd or 21.97% to 1.61, after announcing a shipping joint venture with Sociedade de Turismo e Diversoes de Macau (STDM). The venture is expected to pave the way for a closer relationship with the Macau conglomerate.

Yoshiya was down 0.006 at 0.067 after announcing its share placement plan.

Dynamic Global was down 0.008 at 0.074 on a technical correction.

eCyberChina dropped 0.002 to 0.016 after a debt settlement agreement with ICEA Financial Services.

At 12.30 pm, 12-month Hong Kong dollar forward premiums were at 265-275 pips, compared with 278-288 pips this morning.