Buoyed by gains on Wall Street and ample liquidity, Hong Kong's benchmark index rebounded above the 23,000 resistance level Tuesday, as select blue chips CNOOC and China financials attracted rotational interest.

The dealer said worries over possible new tightening measures in China and prospects of volatility on the Chinese mainland bourses prompted some investors to shift funds out of the mainland and into Hong Kong.

The Hang Seng Index closed up 103.36 points at 23,057.30, after moving in a range of 22,915.79 and 23,148.26. Turnover was 78.03 billion HK dollars (US$ 10 billion).

CNOOC, China's largest offshore oil and gas producer, rose nearly 3 percent to 9.67 HK dollars on the high oil price, which went above US$ 74 a barrel late Monday, and as its parent CNOOC Group reported a 6.5 percent increase in first half pretax profit to 25.7 billion yuan. Hong Kong-listed CNOOC contributes about 90 percent of its parent's profit.

Railway operator MTR continued to benefit from potential gains to come from a merger with the territory's other railway company, KCRC, rising 2.7 percent to 19.98 HK dollars. Heavyweight HSBC, the index's second-largest component by market capitalization, rose 0.5 percent to 145.60 HK dollars on a Daily Telegraph report that the lender is interested in taking over Korean Exchange Bank.

Another index heavyweight, China Mobile, gained 0.2 percent to 91.4 HK dollars, after Daiwa Securities raised its target price to 106 from 91 HK dollars.

Cheung Kong closed up 2.30 at 109.60, Swire Pacific gained 1.55 at 91.80, CCB rose 0.02 to 5.84 and CLP Holdings added 0.55 at 53.20.

China financials were mostly firmer, with China Merchants Bank up to 27.65 HK dollars, Bank of Communications down 0.01 percent at 9.0 HK dollars, Bank of China ended up at 4.14 HK dollars, China Life up to 30.90 and ICBC rose to 4.79 HK dollars.

(Xinhua News Agency July 18 2007)