Shares on the Hong Kong stock exchange edged higher in the morning despite a hike announced over the weekend by the Chinese mainland central bank in required reserves, but plunged in the afternoon to close in negative ground.
In a further move to tighten monetary policies, China's mainland central bank on Saturday announced its 10th raise in the required reserve ratio, by one percentage point, which analysts said was higher than what the market had expected earlier.
The Hang Seng Index opened at 29,017.70, up 175.23 points or 0.61 percent. It held on in the morning, but shifted to a downward move in the afternoon, losing its gained ground before closing at 28,501.50, down 341.37 points or 1.18 percent.
Analysts said they expected the market to move within a narrow range as investors await signals from the U.S. Federal Reserve -- the central bank of the world's largest economy -- on a rate cut or otherwise, which were expected after a meeting on Tuesday.
The benchmark's highest for Monday was 29,137.89 and the lowest was 28,445.67, with turnover totaling 113.08 billion HK dollars (14.61 billion U.S. dollars), down from the 140.12 billion HK dollars (17.99 billion U.S. dollars) on Friday.
Most mainland shares were losers, sending the China Enterprises Index down 431.75 points, or 2.45 percent, at 17,187.28, partly due to the tightening pressure, which analysts said outweighed expectations of the U.S. rate cut.
Developers and banks suffered the most in a wave of profit taking in the afternoon.
HSBC held on in the morning but went down 2.9 HK dollars, or 2. 12 percent, to close at 133.8 HK dollars, partly due to profit taking in the afternoon, on a turnover of 6.1 billion HK dollars, contributing 91.78 points alone to the benchmark's falling.
Following was mainland energy giant PetroChina, down 0.56 HK dollars, or 3.53 percent, at 15.32 HK dollars, contributing 52.36 points to the benchmark falling.
China Mobile, the mainland's largest mobile carrier and No. 1 stock on the Hong Kong main board by market capitalization, lost 1.7 HK dollars, or 1.2 percent, at 140.6 HK dollars, partly due to selling following reduced weighting in the benchmark index.
China Shenhua, the coal mining company joining the Hang Seng Index constituents starting Monday, fell along with most other mainland stocks, down 0.6 HK dollars, or 1.22 percent, to close at 48.45 HK dollars.
China Railway, however, bucked the trend on its second day of public trading in Hong Kong to rise 0.39 HK dollars, or 5.3 percent, closing at 7.75 HK dollars.
The finance sub-index lost the most, tumbling 650.25 points, or 1.59 percent, at 41,467.33 and the properties category also lost 242.20 points at 36,975.32.
The commerce and industry genre lost 180.19 points to close at 16,915.57, and the utilities sub-index closed at 39,683.75, down a minor 37.30 points.
The Hang Seng mainland composite index lost 100.78 points to close at 5,409.97 while its Hong Kong SAR counterpart edged down a minor 15.11 points at 2,936.73.
(Xinhua News Agency December 11, 2007)
