Hong Kong shares slump further in early trade after Wall St slide, regional fall

Hong Kong shares slump further in early trade after Wall St slide, regional fall

	Published : Fri, 26 Jan 2007 04:02 By : Agencies Print this Story

HONG KONG (XFN-ASIA) - Share prices plunged deeper in early trade due to caution following Wall Street's biggest pullback in two months and subsequent falls in early Asian equities trade, dealers said.

Profit-takers cashed out of the market ahead of the weekend, spooked by the triple-digit decline in the Dow Jones industrials average overnight due to a lackluster home sales report and a disappointing bond auction, followed by a sharp 92.50-point drop in the Nikkei 225 index at the end of Tokyo's morning session, they said.

Blue chips in Hong Kong were regarded as too expensive at current levels after recent rallies, they added.

As of 10.20 am, the Hang Seng index was down 298.63 points or 1.44 pct at 20,371.4, off a low of 20,344.34 and a high of 20,457.48.

Turnover was 11.73 bln hkd.

'The correction came as a reasonable thing as the market had gained too sharply this week, with the benchmark index having risen by more than 1,000 points in two weeks,' Ben Kwong, research head at KGI Securities, said.

'Many blue chips and properties have become expensive, which prompted investors to lock in profits before a further correction takes place,' he said.

Investors also worried about any chance for the Chinese government to further impose other credit-tightening measures, which could hit China-related stocks listed in Hong Kong, Kwong said.

Kwong said he expects trading to remain volatile next week due to futures settlement activities.

'The benchmark index will likely hover around 20,200-20,700 points next week,' he said.

Among blue chips, China Mobile extended its losses from yesterday, falling 1.90 hkd or 2.50 pct to 74.25, Hutchison Whampoa was down 0.85 hkd or 1.06 pct at 78.9 and Swire Pacific down 0.20 hkd or 0.21 pct at 93.8.

Properties were mostly lower, with Cheung Kong losing 2.70 hkd or 2.63 pct to 100, Henderson Land down 0.55 hkd or 1.2 pct at 45.25, Sun Hung Kai Properties down 1.75 hkd or 1.80 pct at 95.3 and Sino Land down 0.42 hkd or 2.21 pct at 18.58.

The property sub-index was down 473.57 points or 1.91 pct at 24,341.30.

Banks were mostly lower, with HSBC losing 0.90 hkd or 0.42 pct to 144.10, Hang Seng Bank down 1.4 hkd or 1.29 pct at 107.20, Bank of East Asia down 1.0 hkd or 2.22 pct at 44.0 and BOC Hong Kong down 0.5 hkd or 2.39 pct at 20.40.

Among China stocks, China Life was down 0.80 hkd or 3.46 pct at 22.35, Bank of China down 0.07 hkd or 1.75 pct at 3.93 and PetroChina down 0.23 hkd or 2.34 pct at 9.62 hkd, while China Unicom was down 0.14 hkd or 1.29 pct at 10.72 and Angang Steel down 0.32 hkd or 2.45 pct at 12.74.

Lenovo shed 0.09 hkd or 2.78 pct to 3.15 after the company announced yesterday the president of its operations in the Americas, Scott Smith, is leaving the company.

Lee & Man Paper, which has been allowed to resume trade from this morning after yesterday's suspension, was down 1.32 hkd or 6.76 pct at 18.2 after the company said it has agreed to place 80 mln shares at 18.50 hkd each with not less than six independent investors, dealers added.

roby.lau@xfn.com

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