HK shares up 1 pct to 7-mth high for 7th day, led by Chalco

Hong Kong stocks rose 1 percent to a seven-month high in a seventh session of gains on Friday, lifted by a surge in aluminium producer Chalco, which tracked strong gains in prices of the metal.

Turnover reached HK$86.8 billion, down from the seven-month high of HK$95.2 billion on Thursday.

Trading was volatile in Friday's trading session, with stocks dipping in and out of negative territory, as many investors tucked away recent profits following the extended rally in the Hang Seng Index.

The benchmark Hang Seng Index rose 171.98 points to close at 17,839.87.

The index is at its most overbought position since October 2007, according to its relative strength index (RSI), which reached 81 on Friday. A level above 70 represents an overbought market.

Analysts said liquidity was driving the market as there were no fresh catalysts to spur buying on Friday following a week dominated by corporate earnings and the results of U.S. bank stress tests.

Market sentiment would be buoyed by rising volumes, a sign of investor confidence, analysts added.

CHALCO, REFINERS SOAR China Zhongwang Holdings, Asia's largest maker of aluminium extrusion products, fell about 5 percent from is IPO price in its Hong Kong trading debut on Friday, after the company raised $1.3 billion in the world's biggest IPO since August.

Chalco rose 9 percent to HK$7.63. International aluminium prices have risen 5 percent so far this month.

Oil refiners PetroChina Co Ltd and Sinopec Corp. rose on expectations of a fuel price hike. PetroChina was up 4.1 percent at HK$8.31, while Sinopec gained 1.1 percent to HK$6.36.

Consumer goods exporter Li & Fung Ltd fell 4.6 percent to HK$21.60 after its managing director, William Fung, said most suppliers were expecting a 5 to 15 percent drop in business this year. Fung's comments mirrored the pessimism of other retailers at the World Retail Congress in Barcelona.

Morgan Stanley had valued HTHKH'S stock at HK$1.26 based on a 2009 price-earnings estimate of 12 times, the bank said in a note on April 20.

China's Geely Automobile Holdings fell 4.5 percent to HK$1.28 after the company on Thursday said it had no intention of bidding for carmakers Volvo or Saab.

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