HK shares close up slightly; airlines, property outperform
* HSI drops after recent rally, but turnover stays strong
* Airline shares soar on capital-raising plans
* Property counters rise as investors bet on mortgage cuts
* China Overseas Land dives on planned rights issue
(Updates to close)
By Parvathy Ullatil
HONG KONG, Dec 11 (Reuters) - Hong Kong shares finished slightly higher on Thursday, after rallying 15 percent in a week, but local property counters climbed on hopes of an interest rate cut next week by the U.S. Federal Reserve, and airlines soared on capital-raising plans.
The benchmark Hang Seng Index .HSI finished 0.23 percent higher at 15,613.90.
"An era of zero interest rates is coming," said Alfred Chan, chief dealer at Cheer Pearl Investments. "Major players are covering their short positions on hopes of eventually softer interest rates."
China Southern Airlines (1055.HK) soared 43 percent while smaller rival China Eastern Airlines (0670.HK) shot up 41 percent after announcing plans to place shares worth 3 billion yuan ($438 million) each as part of the government's capital injection plan for the ailing sector.
Both stocks were suspended from trade last month pending capital-raising announcements.
Turnover remained strong at HK$61.4 billion as compared with HK$61.9 billion on Wednesday sending shares in bourse operator Hong Kong Exchanges & Clearing (0388.HK) up 3.3 percent.
Early losses were capped by expectations of further massive support measures from China after trade data on Wednesday showed the Chinese economy was rapidly slowing in response to the global credit crunch, said brokers.
"We do have some significant data coming in from the U.S. overnight, and if that sends the Dow lower, then we will see a bigger retreat on the Hang Seng, probably back to 15,000."
The U.S. is expected to release its November retail sales, producer price index and consumer sentiment data on Friday.
Early dire predictions for November retail sales triggered a dive of 5.4 percent for shares of Li & Fung (0493.HK), which supplies consumer products to Wal-Mart. Continued...
