Hong Kong shares lower

Hong Kong shares fell 2.7 percent on Friday, as investors spooked by disappointing results from meetings of European leaders pushed the Hang Seng Index below a support level that had held for a week. Top beta plays saw losses accelerate after the European Union said an attempt to get all 27 member nations to agree on changing the EU treaty to enforce stricter rules on fiscal management failed.
On Friday in Brussels, EU leaders are holding a summit on how to tackle Europe's debt crisis. "If they fail to decide on something credible, it could trigger outflows from the Hong Kong and China markets," said Alan Lam, Julius Baer's Greater China equity analyst. ---- Shanghai slumps to fifth-straight weekly loss
The Hang Seng Index closed at 18,586.23 points, just below its 50-day moving average, currently seen at 18,655. In early trade, the index broke below 18,818, a level that served as chart support since late last week. On the week, the HSI lost 2.4 percent. Hong Kong, which has lost more than 19 percent in 2011, is one of the region's worst performers this year.
Materials, property, energy and financial stocks, particularly Chinese ones, saw the worst percentages losses. Evergrande Real Estate Group Ltd slumped 7 percent and Country Garden Holdings Co Ltd shed 5 percent. In another sign of negative sentiment, Chow Tai Fook Jewellery Group Ltd priced its IPO at the bottom end of expectations on Friday, raising $2 billion. Haitong Securities delayed the pricing of its $1.7 billion IPO.
Turnover on Friday improved marginally from Thursday, but stayed weak. Warrants accounted for more than 50 percent of total trade at midday. Midland Holdings Ltd, an exception to the trend of lower turnover, slumped 7.5 percent in volume more than twice its 30-day average.
Midland rallied 9 percent on Thursday after Hong Kong's financial secretary was quoted as saying in South Africa that the territory may consider reversing some measures to cool its property market. The Shanghai Composite Index finished down 0.6 percent at 2,315.3, the lowest in 33-months, as A-share turnover fell to its second three-year low in three days. It lost 1.92 percent on the week, its fifth-straight weekly loss. For 2011, the Shanghai index has lost nearly 18 percent.
The Shanghai materials sub-index was a relative underperformer among sectors, down 1.4 percent. China Shenhua Energy Co Ltd was the top drag on the broader benchmark, down 1 percent. Friday's losses extended the Shanghai's stay in the 2,300-2,320 range to a fourth session and the 10th time since July this year it has tested these levels.
Previous moves to these levels preceded official action on October 24 and China's announcement on November 30 that it would make its first cut in reserve requirements for commercial lenders in nearly three years. Market watchers said investors were abstaining from fresh buying, uncertain about how a slowdown in the Chinese economy would impact earnings.