After the worst lunar new year opening in a decade, the Hang Seng Index showed its third-straight day of gains yesterday, ending at 24,022 points.

It was a 3.68 percent rally - sparked by better-than-expected January retail sales in the United States, which helped calm investors' jitters from recent recession fears.

High hopes that the world's largest economy might be able to avoid a recession propped up shipping and export stocks, putting them among the market's sharpest gainers and helping fuel the index's 852-point surge.

Passers-by walk past a bank displaying the upward movement of the HSI yesterday. The market jumped 3.68 percent on Thursday, tracking gains in regional bourses after Wall Street rose overnight. AP

China COSCO and China Shipping Development both jumped 10 percent to close at HK$23 and HK$23.15 respectively. Pacific Basin Shipping also boasted a 5.5 percent gain, closing it at HK$12.68.

Garment exporter Li & Fung and fashion retailer Esprit Holdings both reaped impressive gains yesterday. Li & Fung climbed 3.61 percent and Esprit shot up 4.79 percent.

Stock market sentiments were also boosted as Japan rolled out strong economic data indicating that the country's economy grew twice as much as expected in the fourth quarter of 2007.

"The (Hong Kong) market has been flooded with too much negative news lately," said Castor Pang, a Sun Hung Kai Financial strategist. "Any good news will give the market a boost."

However, market watchers caution that the rosy gain yesterday may only be a knee-jerk technical rebound.

"I think global markets hit rock bottom recently, and the rise (in Hong Kong) indicates a technical correction to the oversold situation in past weeks," First Shanghai Securities Strategist Linus Yip Sheung chi said. But he added that it is still unclear whether the US economy can pull through the sub-prime crisis unscathed, and therefore, investors should not be overly optimistic that the bear run has ended for good.

The main bourse booked a HK$94.3 billion dollar turnover yesterday, indicating a renewed interest in trading after the turnover slumped to a little more than HK$60 billion earlier last week when spooked investors were waiting to see what the market would do.

Yip said that until the US releases corporate earnings, market sentiments will remain mixed.

"Investors should remain very cautious under these circumstances," he said, predicting that the Hang Seng Index will hover around 24,000 points with little chance of breaking the 25,000 mark any time soon.

(HK Edition 02/15/2008 page2)