Hong Kong stocks posted their fourth consecutive day of gains on Monday, led by a fresh rally for blue chip property stocks and industrial conglomerates ahead of the upcoming earnings season. The city's largest property firm Sun Hung Kai Properties jumped more than 2 percent to HK$80.45 year highs as investors eyed a strong local economy and expectations the firm will report strong corporate profits later this summer.
The city's second largest property firm by market capitalisation, Cheung Kong (Holdings), rose 1 percent to HK$83.30, its highest levels since early 2002.
"Everybody is swept away by property. I think there is some irrational exuberance in there," said Francis Lun, general manager at Fulbright Securities.
The blue chip Hang Seng Index rose 0.43 percent, or 62.71 points, to 14,567.
But volume, which surged last week, slowed slightly with HK$17.6 billion (US$2.26 billion) worth of shares changing hands.
J.P. Morgan on Monday raised its 12-month Hang Seng Index target to 16,700 citing diminishing concerns over the impact of rising interest rates and positive local developments, such as the much-discussed opening of Hong Kong's Disney park set for September.
"Fundamentally the market outlook is very positive. The overhang from interest rates is lifting and the market should perform well," said Steven Li, head of research at J.P. Morgan in Hong Kong.
The market shut before the Hong Kong government posted a worse than expected, unchanged unemployment rate for April-June of 5.7 percent.
The top five performing blue chip shares of the day were all property counters.
Mid-tier developer Sino Land was the top blue chip gainer, up 7.3 percent to HK$9.55, its highest level since early 1997.
Sino Land shares have now doubled over the past year.
Fellow Hang Seng freshman New World Development was the second best performer, up 6.15 percent to HK$10.35, its highest level since early 2001.
Property counters account for roughly 15 percent of the Hang Seng index weighting.
Ports-to-telecoms firm Hutchison Whampoa Ltd also continued to gain ground as investors anticipated a handsome set of results thanks to rising revenues from its hefty investment in third generation mobile phone services.
Hutchison gained 0.8 percent to HK$75.65.
China's top offshore oil producer CNOOC Ltd lost ground for the third straight day, down 1.6 percent to HK$4.60 as investors worried about how much the firm may have to pay to win a bid for US oil firm Unocal Corp.
CNOOC is competing with US firm Chevron Corp for Unocal and some investors worry the Chinese oil firm may raise its bid as a crucial vote by Unocal shares holders on August 10 approaches.