Asian Markets Muddled

Asian markets ended mixed on Thursday, as volumes continued to thin out ahead of year-end, while investors locked in gains from the recent China-led rebound in Hong Kong shares.

In China, the Shanghai Composite Index entered a two-day winning streak, pulled higher by commodity stocks like PetroChina(PTR Quote - Cramer on PTR - Stock Picks). The index finished 101 points, or 2%, higher, at 5043, retesting the 5,000 points benchmark. In Hong Kong, after a similar rally, the Hang Seng pulled back 12 points, or 0.05%, to 27,017.

"The general feeling of the Hong Kong market is to try to lock in profit while it is rebounding," says Jackson Wong, investment manager for Tanrich Securities in Hong Kong. "The market is window dressing for the year-end, and pretty much waiting for China or the U.S. to roll out more news."

Wong adds that investors can expect the Hang Seng to continue trading in bands of 1000 points, upwards and downwards, until the world's largest economy, or the world's fastest growing one, give further indication of where they are headed in 2008.

Some of that news came after market hours closed, when China announced that it raised interest lending rates by 18 basis points, to 7.47%.

Leaders in Hong Kong trading included financial stocks, which gained strength from China Investment Corp.'s announcement on Wednesday that it will take a 9.9% stake in U.S. investment banker Morgan Stanley(MS Quote - Cramer on MS - Stock Picks) for $5 billion.

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