Hefty Interest Rate Cut, Money From Thailand Ignite Hong Kong Stocks : Securities: The Hang Seng index goes through 6,000 for the first time.

HONG KONG â€”  Stocks powered through 6,000 points on the Hang Seng index for the first time Monday, propelled by a big interest rate cut and money fleeing Thailand’s political crisis, brokers said.

Buyers, straining at the leash since banks announced a surprise one-percentage-point cut in the prime rate after the market closed Friday, ran wild after the opening.

Within minutes, the blue chip index surged more than 170 points to a high of 6,032.10 before profit takers moved in.

The Hang Seng closed just shy of the 6,000 barrier. But the 133.43-point (2.28%) gain still took the market to a record close of 5,993.11.

“Overseas funds, local institutions and retail investors were all there in the market taking positions,� said Percy Au-Young, a senior research manager at Sun Hung Kai Securities.

A major beneficiary was HSBC Holdings, parent of Hongkong & Shanghai Banking Corp., which is bidding for Britain’s Midland Bank. HSBC closed up 12.8 cents at $5.80.

Hong Kong stocks have climbed 40% since the beginning of the year as overseas investors, previously concerned about the British colony’s return to China in 1997, have turned positive because of rapid economic growth just over the border in southern China.

But Jacky Chiu, head of research at Schroders Securities, said the latest surge was more than just an influx of speculative money from the United States and Europe looking to cash in on the south China boom.

Last week’s slaughter on the streets of Bangkok diverted investments to Hong Kong, despite the fall of un-elected Prime Minister Suchinda Kraprayoon over the weekend.

“International funds have lowered their investment weighting in Thailand and switched liquidity to the Hong Kong market,� Chiu said. “The amount is considerable as Thailand . . . has attracted huge investment.�

Thai stocks plunged last week as troops fired on pro-democracy demonstrators, although the market recovered sharply Monday after Suchinda announced his resignation.

The huge inflow into Hong Kong has pushed up the local dollar against the U.S. dollar, to which it is pegged.

The Hongkong Assn. of Banks announced the one-percentage-point cut in deposit rates, while Hongkong Bank and Standard Chartered Bank cut their prime rates to 7% in a joint effort to ease pressure on the peg of $7.8 (Hong Kong) to the U.S. dollar.

Analysts were little concerned by the index’s failure to close above 6,000, saying the market still had plenty of energy.

“It’s just natural for the market to encounter profit taking since the Hang Seng had already gained some 350 points since last Wednesday,� said Sun Hung Kai’s Au-Young.

Christina Cheung, a director at South China Securities, saw the market going higher yet.

“With the continuing cash flow from overseas and buying interest from retail investors, I wouldn’t be surprised to see the Hang Seng testing 6,200 some time this week,� she said.

In other overseas markets, Tokyo stocks closed sharply higher, boosted by bargain-hunting. The 225-share Nikkei average rose 334.00, or 1.8%, to close at 18,555.00.

Stock prices also moved up in Frankfurt, shaking off some early selling pressure to close 0.5% higher as the market’s outlook brightened. The 30-share DAX index rose 8.61 points to 1,811.57, its highest close since Aug. 3, 1990.

The London Stock Exchange was closed for a public holiday.