Hong Kong's Stock Index Rises 0.7 Pct on Wednesday

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Analysts said attractive stock prices will likely support further gains in the Hang Seng Index, which they expect to rise above 23,500 in the near term. However, analysts also said the weak U.S. economic outlook and rising Chinese inflation will continue to curb the market.

The blue-chip Hang Seng closed 152.49 points, or 0.7 percent, higher at 22,617.01, after hitting a high of 22,811.35 in the morning session. The gains followed Tuesday's 6.4 percent surge, although the index is still down about 19 percent since the end of last year.

Chinese banks led the day's blue-chip gains after ICBC and Bank of China reported better-than-expected 2007 results.

Reduced exposure to U.S. asset-backed securities by both banks soothed worries that Chinese lenders might be more seriously affected by U.S. subprime fallout than previously thought, analysts said.

ICBC, China's biggest lender by assets, rose 2.9 percent to HK$5.35, retreating from a high of HK$5.42 hit earlier in the session.

Bank of China rose 1.9 percent to HK$3.30, China Construction Bank jumped 1.4 percent to HK$5.66, and Bank of Communications climbed 1.0 percent to HK$8.88.

Other blue-chip heavyweights also rose, with China Mobile edging up 0.7 percent to HK$113.30 and HSBC inching up 0.2 percent to HK$127.30.

And Hong Kong Exchanges, the stock market operator often seen as a proxy for the performance of the local exchange, rose 2.5 percent to HK$130.50.

In its Wednesday debut, Chinese snacks producer Want Want fell below its HK$3.00 offer price to close at HK$2.92, following a weak response to its initial public offering.