Hang Seng index remains down

Hong Kong shares declined for the fifth straight session on Wednesday, falling 0.5 percent in weak turnover that is expected to persist in the final weeks of 2011 with most long funds seen as done trading for the year. The Shanghai Composite Index also dropped for a fifth day in a row, shedding 0.9 percent to end below a long-term chart support level and at another 33-month low.
Losses in Shanghai accelerated in the afternoon after a key economic meeting of China's leaders doused any flickering hopes for imminent monetary policy easing to support the slowing economy. The meeting broadly endorsed a decision by leaders last week to avoid big policy changes.
Strength in Hong Kong utilities pointed to caution, with an uncertain outlook for the Chinese economy and the eurozone debt crisis likely to keep investors wary of risk going into the new year. The Hang Seng Index ended at 18,354.4 points, while the China Enterprises Index of the top mainland firms listed in Hong Kong ended down 0.7 percent at 9,888.15 points.
Turnover on the Hong Kong bourse slumped to the lowest in 12 sessions, with warrant activity and short selling accounting for 42 and 6 percent at midday respectively, but losses among top beta names came in relatively stronger volume. Evergrande Real Estate Group Ltd slipped 3.9 percent in volume that exceeded its 30-day average after reporting a sharp drop in November sales.
The Chinese developer, whose Hong Kong listing is down 22.5 percent this year, also announced that it had stopped acquiring land, believing sales would remain slow into the second quarter of 2012. Power Assets is now trading at 13.1 times forward 12-month earnings, 12.8 percent more than its historical median, according to Thomson Reuters StarMine. This suggests that investors were willing to pay a premium for safety in volatile market conditions.
Underscoring the adverse conditions, China Polymetallic Mining Ltd slumped badly on its market debut. Its shares, sold in the IPO at HK$2.22, first traded at HK$2.20 and closed 38 percent lower, at HK$1.35. The day's other debutant, Baoxin Auto Group Ltd fared comparatively better, sliding 7.4 percent in first-day trading.
On the gray market, traders said New China Life Insurance and Chow Tai Fook Jewellery Group Ltd, scheduled to make their listing debuts on Thursday, were down about 15 and 6 percent compared with their respective issue prices. Shanghai's close at 2,228.5, below chart support seen between 2,245 and 2,260 points, plunging the benchmark further into oversold conditions on the charts.
Shares of industrial and resources-related companies, generally seen as more sensitive to economic growth, led losses. The Shanghai materials sub-index dropped 2 percent and a similar gauge for energy declined 1.4 percent. China Petroleum & Chemical Corp (Sinopec), seen as the most sensitive to global oil prices among the three Chinese oil giants, was among the Shanghai benchmark's top drags, tracking lower global oil prices with a 0.8 percent decline. New China Life Insurance Co Ltd, the mainland's third-largest life insurer, is expected to make its listing debut on Friday after pricing its $1.9 billion dual Hong Kong-Shanghai IPO at the low end of expectations.