5:00AM New York, 7:00PM Hong Kong - Hong Kong budget surplus to reach HK$100 billion.

Hong Kong stock indexes gained buoyed by rising metal and oil prices, including speculations that the U.S. Federal Reserve will cut interest rates on fears of falling consumer spending.

In Hong Kong trading Hang Seng index bucked the downtrend in the morning session rising to a six week high at 1.9% or 502.95 at 27,615.85, while the China Enterprises index of Hong Kong-listed shares rose 3.1% or 479.75 at 16,139.46, the biggest one day percentage gain since November 29.

Daily turnover on main-board soared to HK$120.3 billion compared to HK$114.9 billion recorded yesterday.

The Sing Tao Daily reported today that Hong Kong Finance Secretary John Tsang Chun-wah may announce in the city’s budget next month measures including a one-time tax return with a higher cap, lowering the marginal tax bands and tax rate, and an increase in the personal tax concession ceiling.

Tsang will also offer taxpayers a one-time tax rebate of 70% to 80% of salaries tax, compared to increase of 50% in 2006. He is also expected to raise the total allowance available under the cap which was set at HK$15,000 last year.

The Standard online news also reported today that Hong Kong's budget surplus will probably quadruple from thegovernment October estimates of HK$25.4 billion to HK$100 billion.

Commodity stocks gained after gold and copper prices increased. Gold prices reached $882.55 per ounce on a falling U.S. dollar.

Gold producer Lingbao climbed 5% to HK$5.93, while Jiangxi Copper soared nearly 9% to HK$20.55. Zinc producer Hunan Nonferrous Metals Corp jumped 7.4% to HK$5.55.

Crude oil for February rose 0.7% to $97 per barrel. Cnooc Limited spiked 5.7% to HK$13.90. PetroChina Co Limited rose 2.7%.

Property companies gained on lingering speculation the U.S. Federal Reserve will cut the key rate this month to sustain growth. Sun Hung Kai Properties edged up 2.4% to HK$172.80. Cheung Kong Holdings Limited increased 2.4% to HK$146.

Parkson Retail Group Limited jumped 4.3% to HK$86.35 on news its majority shareholder was selling close to 8 million shares at a discount at about HK$78.66 per share. The stock was quoted at HK$82.80 at yesterday’s close.

However exporters fell on fears of a slowdown in the U.S. Li & Fung dropped 2% at HK$27.4.

Lenovo plunged 10.4% to HK$5.88 after research firm CLSA downgraded the stock to sell on rising speculation of a slowdown in information technology spending in 2008 and increasing costs. HSBC tumbled 0.3% to HK$127.90.

China High Speed Transmission Equipment dropped 6.2% to HK$18.02 following a secondary share placement.


5:00AM New York, 7:00PM Tokyo-World Bank says Japan economic growth to slow to 1.8% in 2008.

In Tokyo trading Nikkei 225 bucked a 0.2% decline by mid-day to close up 0.49% or 70.49 to 14,599.16, while the broader Topix Index soared 19.26 to 1,422.32.

In the first section of the Tokyo Stock Exchange 9.8 billion shares worth 1.2 trillion yen were traded and in the second section 261 million shares worth 4.3 billion yen changed hands.

Of the Nikkei 225 stocks 144 gained, 71 declined, and 10 were unchanged.