Hong Kong, China shares fall

Shares in Hong Kong and China extended losses to a fourth straight session on Tuesday on fears that European leaders have not done enough to staunch the region's raging debt crisis and concerns that China's economy is rapidly losing momentum. The Hang Seng Index fell 0.7 percent to 18,447 points while the Shanghai Composite Index tumbled 1.9 percent to around 2,249, testing long-term chart support levels as investors looked to reposition themselves for a slowdown in the Chinese economy.
A break below the 2,245-2,260 range for the Shanghai benchmark could add to bearish momentum in the mainland and Hong Kong markets, already among the worst performers in Asia this year. The former figure is a trend line connecting the lows in 2005 and 2008, while the latter was a major peak in 2001. "Unless there's a huge surge in volume, I'm not going to be making any changes to my portfolio," said a Shanghai-based manager of a Qualified Foreign Institutional Investor (QFII) fund, who is not authorised to speak to the media and declined to be identified.
The Hang Seng's materials sub-index fell 1.2 percent while its counterpart in Shanghai slumped 3.6 percent. Shares of China's biggest cement producer, Anhui Conch, fell 4.5 percent in Shanghai and lost 2.7 percent in Hong Kong. Among energy plays, oil and gas producer PetroChina Co Ltd lost 1.2 percent. Financials also retreated on concerns about cooling demand in China and further signs of weakness in the Hong Kong and mainland property markets.
While Beijing is expected to reduce banks' reserve requirement ratios next year to boost lending and possibly even cut interest rates, any moves to ease curbs on the property market are seen as highly unlikely unless Chinese leaders believe inflation has been tamed or prices threaten to collapse. Ping An Insurance, China's second-largest insurer, was the top drag on the Shanghai benchmark, losing almost 4 percent. It lost 1.4 percent in Hong Kong.
The China Enterprises Index of top Chinese companies listed in Hong Kong fell 1 percent. Turnover on the Hong Kong bourse neared a two-week low, helping to exaggerate price movements as investors stayed away amid weakness in global markets and were reluctant to stake out fresh positions ahead of the year-end. Citic Securities Co Ltd, the mainland's largest brokerage, slumped 4.1 percent in relatively strong volume.