Hong Kong shares end 0.42% higher

Hong Kong stocks ended 0.42 per cent higher on Friday following another positive lead from Wall Street, but gains were capped by profit-taking after a rally the previous day.

The benchmark Hang Seng Index closed up 81.75 points at 19,640.80 on turnover of HK$41.11 billion ($A5.10 billion). The index rose 2.9 per cent for the week.

Ben Kwong, chief operating officer at KGI Asia, said the low turnover "reflects most market participants are still cautious".

South China Research said in a note that while speculation about more mainland policy easing had supported the Hong Kong bourse "the upside remained shaky on thin trading, which also implied a lack of confidence."

Sentiment was slightly weighed by a state-run China Securities Journal report citing an urgent government notice saying Beijing had told local governments to keep a firm grip on the housing market to prevent prices from rebounding.

Blue-chip developer China Overseas Land ended down 2.6 per cent at HK$17.10 while Evergrande slid 0.5 per cent to HK$3.80.

But the index was kept in positive territory by another lead from Wall Street, which rose on strong earnings from IBM and online auction house eBay.

The Dow climbed 0.27 per cent, the S&P 500 added 0.27 per cent and the Nasdaq rose 0.79 per cent.

In Hong Kong China Unicom surged 7.2 per cent to HK$10.74 after saying it added 3.03 million 3G subscribers in June, an 11 per cent increase from June.

Chinese shares closed down 0.74 per cent. The Shanghai Composite Index, which covers both A and B shares, lost 16.20 points to 2,168.64 on turnover of 54.5 billion yuan.

Dealers were spooked after China ruled out the possibility of any loosening measures in the property sector, dealers said.

State media cited a government notice as saying Beijing has ordered local governments to strictly implement property control policies and rectify loosening measures that have been introduced in a bid to limit price rises.

"The notice dampened hopes for policy loosening in the housing market", Li Wenhui, an analyst at Huatai Securities, told Dow Jones Newswires.

Developer Gemdale dropped 2.16 per cent to 5.89 yuan, Poly Real Estate fell 1.82 per cent to 11.35 yuan and China Enterprise shed 1.55 per cent to 4.46 yuan.

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