Hong Kong shares rebound by 0.53 pct

Bargain hunting and another record close on the Shanghai equities market helped Hong Kong's benchmark index end higher Tuesday. But traders said lingering concerns over a global credit crunch would likely limit further gains.

The blue-chip Hang Seng Index rose 116.22 points, or 0.53 percent, to 22,007.32, as the Shanghai Composite Index ended at its seventh record so far this month.

Turnover fell to 53.27 billion Hong Kong dollars (6.82 billion U.S. dollars), down from 63.03 billion Hong Kong dollars (8.07 billion U.S. dollars) Monday, as China's 10-year high inflation rate for July of 5.6 percent and the fallout from the U.S. subprime-mortgage market weighed.

Traders said the Hang Seng Index will likely trade in a narrow range of 21,800 to 22,500 in the near term, as investors have switched from momentum buying to selective purchases of high-quality companies.

China Unicom rose 2.7 percent to 12.76 Hong Kong dollars after Morgan Stanley upgraded its recommendation on the mobile-phone operator to overweight from equalweight on expectations of a sustained improvement in its Code Division Multiple Access business.

Ping An Insurance also benefited from a rating upgrade. The company, China's second-largest life insurer by premiums, rose 2.5 percent to 63.75 Hong Kong dollars after UBS raised its rating to buy from neutral.

Among the blue chips, Cheung Kong Infrastructure (CKI) was the biggest decliner after Deutsche Bank cut its rating to hold from buy following the company's sale of the Guangzhou East-South-West Ring Road to a local government partner for the lower-than-expected price of 1.22 billion yuan. CKI fell 1.7 percent to 25.85 Hong Kong dollars.

Bank of Communications, China's fifth-largest bank by assets, fell 0.4 percent to 8.32 Hong Kong dollars despite the compiler of the Hang Seng Index saying Monday the bank would join the benchmark index next month. Bank of Communications will become the 40th member of the Hang Seng Index. It will have an index weighting of 3.01 percent.

The finance sub-index went up 142.04 points or 0.41 percent to 34,565.26.

The properties sub-index rose 96.89 points or 0.38 percent at 25,585.07.

The commerce and industry sub-index went up 68.14 points or 0.56 percent to 12,178.26.

The utilities sub-index soared 555.72 points or 1.58 percent at 35,812.34.