Hong Kong's benchmark Hang Seng Index closed lower Wednesday after three consecutive record high close, dragged by the heavyweight HSBC and weakness in Wall Street.
The blue-chip Hang Seng Index fell 110.70 points, or 0.47 percent, to close at 23,362.18 after trading between 23,228.56 and 23,439.83 during the session. Turnover totaled 100.50 billion HK dollars, up from 96.57 billion HK dollars Tuesday.
Three of the four major categories lost ground. The Finance went down 0.64 percent, followed by the Properties at 0.49 percent and the Commerce and Industry at 0.41 percent. The Utilities gained 0.36 percent.
But the downside was limited by bargain hunting amid ample liquidity. Traders expect the index to stay above 23,000 until Monday's futures expires.
HSBC weighed on the index, falling 1 percent to 143.80 HK dollars on US subprime mortgage concerns. These concerns also weighed on Wall Street overnight. The Nasdaq fell 1.9 percent while the Dow Jones Industrial Average fell 1.6 percent.
But traders said the Hang Seng's downside was limited by strength in both the Shanghai and Shenzhen markets, adding that subprime lending concerns do not have a major impact on most Hong Kong companies other than HSBC.
But Ample Financial Group fund manager Alex Wong remained cautious. "The correction may not be a one day thing. It's worth watching a strengthening yen as it may trigger an unwinding of the yen carry trade," Wong said.
China Mobile also pulled the index lower after its recent outperformance, falling 0.1 percent to 93.25 HK dollars. Oil major CNOOC ended 3.1 percent lower at 9.39 HK dollars on softening oil prices.
But the decline in oil prices boosted Hong Kong airline operator Cathay Pacific, which bucked the market downtrend to end 1.9 percent higher at 20.10 HK dollars. Dry bulk carrier Pacific Basin also went against trend, surging 6.5 percent to 12.50 HK dollars on news that it plans to sell two handysize dry-bulk carriers for US$ 45 million each and on plans to buy a 45 percent stake in China's Nanjing Longtan Tianyu Terminal.
Air China soared 17.6 percent to 7.27 HK dollars, off an all-time high of 7.35 HK dollars, boosted by its forecast that its first-half net profit will surge more than 20-fold.
Chinese steel producer Angang Steel also defied overall losses to end 1.6 percent higher at 22.20 HK dollars, extending a 20 percent gain from Tuesday on a slew of rating and target upgrades.Gains in Air China helped capped losses in the H-share index, which fell 0.6 percent to 13,399.96. But traders expect to see more short-term weakness after H-shares made hefty gains recently.
(Xinhua News Agency July 26 2007)
