The benchmark Hang Seng Index closed at a second consecutive record high on Monday, buoyed mainly by China-related firms following sharp gains in the Chinese mainland's stock market.

The blue-chip Hang Seng Index opened 121.55 points down but closed 73.66 points, or 0.32 percent up at a new record high of 23,291.90, after trading between 23,152.54 and 23,389.94 during the session. The turnover totaled 84.64 billion HK dollars, up from 83.45 billion HK dollars last Friday.

Analysts said the Hong Kong stock market will likely continue to rise in the near term on ample liquidity and expectations of strong corporate earnings growth.

"In today's session, profit-taking in the early morning quickly gave way to rotational buying from investors," said Ben Kwong, chief operating officer of KGI Asia Ltd.

"The Hong Kong market will maintain its upward trend in the near term as liquidity remains very strong, with the Hang Seng Index likely facing resistance at 23,500 level," he said.

China's central bank raised key lending and deposit rates 27 basis points after the government said a day earlier the country's economy grew faster than expected in the second quarter and inflation was on the rise.

"The latest measures led investors to believe the Chinese government may not take any further steps in the short term to cool the country's economy," said Kitty Chan, director of Celestial Asia Securities Ltd.

Three of the four major categories gained ground. The Properties, the largest gainer, went up 266.04 points or 0.94 percent to 27,661.88. The Finance rose 96.38 points, or 0.27 percent to 35,689.18. The Commerce and Industry moved up 33.24 points or 0.25 percent to 13,234.94. The Utilities moved down 45.65 points, or 0.12 percent to 36,726.80.

The Hang Seng China Enterprises Index broke a new high of 13,352.62 and gained 168.17 points to 13,320.42.

On Chinese insurance stocks side, PICC P&C set the new high since listing of 8.1 HK dollars and surged 13.58 percent to 8.03 HK dollars, benefiting from a 26.56 percent rise of premium income in the first half of year. China Life and Ping An rose 1.13 percent and 1.04 percent respectively.

On Chinese telecom stocks side, China Mobile was up 0.38 percent, China Unicom down 0.84 percent, Netcom up 0.24 percent, and China Telecom flat.

On the six banks front, Bank of China, Bankcomm and CM Bank climbed 0.175 percent to 1.36 percent. ICBC lifted 2.24 percent after Merrill Lynch raised its target price to 5.9 HK dollars. CCB got up steam in the afternoon, broke the new high since listing of 6.08 HK dollars and climbed 0.84 percent to 6.04 HK dollars. CITIC Bank added 1.67 percent.

HSBC was marginally down 0.34 percent. Hang Seng Bank went up 0.44 percent.

On resource stocks side, PetroChina and Sinopec Corp edged up 0.49 percent and 0.72 percent respectively. Coal stocks China Shenhua, China Coal and Yanzhou Coal climbed 0.62 percent to 1.89 percent. Jiangxi Copper added 2.39 percent, led by an increase in commodity price.

(Xinhua News Agency July 24 2007)