Hong Kong shares tumble on Wall St slide; blue chips track ADR falls

Hong Kong shares tumble on Wall St slide; blue chips track ADR falls - UPDATE

	Published : Mon, 22 Oct 2007 04:01 By : Agencies Print this Story

HONG KONG (XFN-ASIA) - Share prices were sharply lower in morning trade in line with the region following heavy falls on Wall Street Friday amid renewed worries over the US economy and corporate earnings.

Major blue chips such as China Mobile and HSBC tracked falls in prices of their American Depositary Receipts (ADRs) in New York after the US market suffered its third biggest drop this year.

The Dow Jones Industrial Average tumbled 366.94 points or 2.64 pct on Friday.

Dealers noted that the local bourse was ripe for a correction after its recent record-breaking run, and that falls on Wall Street as well as the mainland markets provided a trigger for investors to lock in profits.

At 11.01 am, the Hang Seng Index was down 852.79 points or 2.89 pct at 28,612.26, off a low of 28,336.97 and high of 28,698.88.

Turnover was at 53.69 bln hkd.

'Selling was across the board as investors decided to lock in profit from recent strong gains,' said

Winner Lee, associate director at BNP Paribas.

'Sentiment is bearish after sharp falls on Wall Street last Friday and weakness in Asian markets this morning,' she said.

Lee noted that the US markets were concerned about weak earnings of some big corporations and a possible slowing down of the US economy.

Local investors used the concerns as excuses to take profit, she said.

'The wave of selling today is not surprising because the market is already overbought. From mid-August until last Thursday, the benchmark index has risen by about 50 pct and a correction was widely expected,' she said.

China Mobile was down 5.30 hkd or 3.58 pct at 142.60 and HSBC was down 3.90 hkd or 2.59 pct at 146.70 after their ADRs fell 4.7 pct and 2.99 pct respectively in New York on Friday.

UBS also downgraded HSBC's Europe-listed shares to 'neutral' from 'buy', citing possible slowdown in the bank's Europe growth and a tough environment for its US lending arm.

China Mobile is expected to report its third quarter results later today.

Oil counters also tracked falls in their ADRs, with CNOOC down 0.34 hkd or 2.36 pct at 14.04 and Sinopec down 0.46 hkd or 3.75 pct at 11.80.

PetroChina recovered from early falls triggered by a 7 pct drop in its ADR price. The company kicks off a marketing roadshow today for its A-share IPO.

PetroChina, which plans to offer up to 4 bln A-shares for a Shanghai listing, will open retail subscriptions on Oct 26 while institutional sales are scheduled for Oct 25-26. Listing is set for Nov 5.

The stock was up 0.06 hkd or 0.32 pct at 18.98, recovering from an early low of 18.08.

Among other blue chips, Hong Kong Exchanges was down 3.80 hkd or 1.50 pct at 248.80, Cheung Kong down 5.50 hkd or 4.15 pct at 127 and Hutchison Whampoa down 1.60 hkd or 20.5 pct at 83.60.

China financials were also lower, with China Construction Bank down 0.25 hkd or 3.42 pct at 7.05, Bank of China down 0.24 hkd or 5.06 pct at 4.50, China Life down 1.25 hkd or 2.44 pct at 50.05, ICBC down 0.28 hkd or 4.12 pct at 6.52 and Bank of Communications down 0.44 hkd or 3.75 pct at 11.28.

The Hang Seng China Enterprises Index was down 777.25 points or 3.95 pct at 18,943.71.

In the property sector, Henderson Land was down 1.35 hkd or 2.27 pct at 58.10, Sun Hung Kai Properties down 5.80 hkd or 4.32 pct at 128.60, Sino Land down 1.06 hkd or 5.44 pct at 18.42, New World Development down 1.0 hkd or 3.96 pct at 24.25 and Wharf Holdings down 1.60 hkd or 3.97 pct at 38.75.

The property sub-index fell 1,393.91 points or 4.22 pct to 31,598.44.

Among local banking stocks, Hang Seng Bank was down 5.40 hkd or 3.61 pct at 144.10, Bank of East Asia down 0.75 hkd or 1.6 pct at 46.05 and BOC Hong Kong down 0.65 hkd or 3.04 pct at 20.75.

The financial sub-index was down 1,246.91 points or 2.77 pct at 43,824.30.

(1 usd = 7.8 hkd)

jun.concepcion@xfn.com

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Hong Kong shares tumble on Wall St slide; blue chips track ADR falls - UPDATE